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Level 4

Changing state tax free muni fund with move

I am considering moving from NJ to PA.   Is the following a good strategy.   Sell Vanguard's NJ tax free muni fund while still living in NJ.  Buy Vanguard's PA tax free muni fund when I am in PA.  Any "gotchas" I should be aware of?


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Level 20

Changing state tax free muni fund with move

Simple answer: Yes that's a good strategy.

Any gotchas would depend on details. If the sale would result in a short term capital gain, you might want to wait until it becomes long term. Capital gains, long term or short term, can in increase your AGI affecting eligibility for other tax benefits (e.g. EIC). 

2 Replies
Level 20

Changing state tax free muni fund with move

Simple answer: Yes that's a good strategy.

Any gotchas would depend on details. If the sale would result in a short term capital gain, you might want to wait until it becomes long term. Capital gains, long term or short term, can in increase your AGI affecting eligibility for other tax benefits (e.g. EIC). 

Level 4

Changing state tax free muni fund with move

Thank you !