Darn, I executed a wash sale for the second time, last Friday. Completely, my miss. I tried to get the brokerage to reverse the trade since it didn't settle with the Mutual Fund company until Monday (T+1). Unfortunately, they were not able to do it.
What happened?
- Since 2025, I've to doing tax loss harvesting for the municipal bond mutual funds due to rising interest rates.
- I started by doing only one fund at a time. Typically, I buy the shares, wait at least 31 days before selling other shares at a loss. This has worked well since shares have gone up after I make the purchase.
- Based on the trend of interest rates, I decided that selling first and buying back later might be better since interest rates appear to be trending up.
- I decided to try the strategy of selling first on one municipal bond mutual funds.
- When choosing which fund from which to sell, I mistakenly chose a fund that I assumed had no purchases made in the last 30 days, but did not specifically check the recent transactions.
The result is that the realized loss I was planning to take was eliminated and added back to the shares that was purchased within the past 30 days. The loss is now unrealized and will need to be taken with a future sale.
Since I am tax loss harvesting multiple mutual fund or stock/ETF concurrently, I am adding a quick check to confirm whether there have been buys/sells within past 30 days, before making any trade. While a wash sale is not the end of the world, not even close, I prefer not to cause one to happen in the future.
This is not financial nor trading advice. Please consult a professional advisor.
Copyright © 2026 Achievement Catalyst, LLC
Subscribe to My Wealth Builder
No comments:
Post a Comment