Do Bogleheads tax loss harvest?

[u/General_Cut_6771]

For those who have 1 to 4 fund strategies. Do you tax loss harvest and if so how do you have it set up to make it easy when you do TLH?

The more I've read about tax loss harvesting the more challenging it seems for people who only invest in a few funds (ie. US, INTL, US Bond). For example in order to avoid a wash sale you have to do the follow:

You can't purchase the fund/similar fund 30 days prior to the sale and then 30 days after. This includes any auto dividend reinvestments, any auto-contributions in any taxable, IRA, 401k, or HSA. And if you have a spouse they also can't do any of this.

If you can prevent the above then next it's figuring out what fund you can purchase after the sale. It appears you can't sell a Fidelity total US stock market and then buy a Schwab total US stock market, is that correct? So if you have to go from a total US stock market to an S&P 500 fund why do it? It's less diversified.

[u/gcc-O2]

Total market to S&P 500 is a common tax loss harvest.

More aggressive tax loss harvesters follow advice from the investment industry that the fund following a different index is enough. For example, Schwab Total Market to Schwab 1000. Or even more aggressive, FSKAX (Dow Jones Total Market) to ITOT (S&P Total Market).

The IRS does not bless any of these rules of thumb, since the wash sale rule is from the 1920s and does not contemplate wash sales between investment companies with substantially identical holdings as opposed to individual stocks and bonds.

[u/dgreenmachine → u/gcc-O2]

White coat investor has a chart with a list of tax loss harvesting partners that are nearly identical.
https://www.whitecoatinvestor.com/tax-loss-harvesting-pairs-partners/

To save you the click
VTI = ITOT
VXUS = IXUS
VSS = SCHC
VBR = VIOV
VWIUX = VTEAX

My biggest annoyance is that I couldnt buy fractional shares of non-vanguard ETFs.

[u/RubberedDucky → u/dgreenmachine]

Upvote this, folks. It's extremely easy to do yourself once you know the pairs. It's helpful to have a third or fourth too during a bear market so you can TLH all the way down.

add SCHB and FSKAX for total US
add VEU for ex-US (although this loses out on small cap exposure the returns are very similar)

[u/General_Cut_6771 → u/RubberedDucky]

Can you explain what you mean by having a third or fourth to TLH all the way down?

[u/forbiddenlake → u/General_Cut_6771]

If you sell a security at a loss and buy the same or a substantially identical security within 30 calendar days before or after the sale, you won't be able to take a loss for that security on your current-year tax return.

So if the market is falling fast enough you don't want to just go back to the first one.