Betterment vs VFIAX

Facebook / Eng
RtyyyWqas

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RtyyyWqas
Mar 27, 2017 20 Comments

Maybe someone knows.

I have a betterment account. And I have tax loss harvesting enabled.

If I choose to use VFIAX (vanguard 500 index fund) for 401k, can this trigger wash sale rule with betterment?

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TOP 20 Comments
  • Facebook / Eng
    RtyyyWqas

    Go to company page Facebook Eng

    RtyyyWqas
    OP
    Ok, so looking at Betterment index funds the closest I see is VTI - total stock. Which is substantially identical to VTSAX. However according to internet VTSAX is not substantially identical to VFIAX.

    So basically betterment VTI ~ VTSAX ~/~ VFIAX.

    That said, I am not very confident this is correct.
    Mar 28, 2017 1
    • Apple / Eng
      S Nutella!

      Go to company page Apple Eng

      BIO
      Lmfao
      S Nutella!
      You are correct. But there are other completion funds that can help mimic VTSAX. VFIAX only covers top 500 companies and does not include mid cap and small cap. So ideally you want 81% vfiax plus the 19% of vexmx extended market fund to fully be as good as VTSAX
      Mar 29, 2017
  • VMware
    yvJS68

    Go to company page VMware

    yvJS68
    Wash sale. Selling a stock at a loss and then less than 30 days later buying it back. If you try to claim the loss as a deduction against income this is illegal.

    The IRS rules that if you sell a stock at a loss from a taxable account and buy it back less than 30 days later in an IRA this is a wash sale.

    It takes a special type of human being to come up with these ideas. When I was trading stocks, if I had a dog I was tired of, I sold it for a loss and never looked back.

    Selling index funds and buying them back is beyond special.

    You guys deserve jail time
    Mar 28, 2017 1
    • Facebook / Eng
      RtyyyWqas

      Go to company page Facebook Eng

      RtyyyWqas
      OP
      TLH is a pretty smart concept IMO. Thsts how evolution works, gov comes up with some regulations and taxpayers come up with workarounds.

      You dont avoid taxes though, you postpone them until you sell stock.
      Mar 29, 2017
  • LinkedIn
    Howyoudoin

    Go to company page LinkedIn

    Howyoudoin
    Great question. I recently opened a Wealthfront account but I still manage most of my investments myself. I wonder if this means I have to be very careful about investing in more index funds.
    Mar 28, 2017 1
    • Facebook / Eng
      RtyyyWqas

      Go to company page Facebook Eng

      RtyyyWqas
      OP
      Yeah, I was able to avoid the issue by using low fee target date fund in my 401k. But my wifes 401k is not as great, target funds have 0.5% expense ratio compared to 0.05% expense ratio for the vanguard index fund mentioned in OP.
      Mar 28, 2017
  • Apple / Eng
    S Nutella!

    Go to company page Apple Eng

    BIO
    Lmfao
    S Nutella!
    How much TLH was wealthfront able to do for you in 2016?
    Mar 28, 2017 5
  • Yahoo
    C.E.O

    Go to company page Yahoo

    C.E.O
    What is wash sale rule?
    Mar 28, 2017 2