Harvest some tax write-offs | VTI , SPY
Money Magazine’s recent series of tips to make “lemons into lemonade” includes some suggestions for swapping positions to take tax write-offs while maintaining market exposure.
Tip 3 is to “Harvest some tax write-offs”. The tip is based on a move called a tax swap where you sell a losing fund and reinvest the proceeds in a similar one. The tax swap generates tax savings while keeping you invested pretty much as you were so you’re ready for a rebound.
As an example, Money suggests trading a U.S. large-cap fund like the Vanguard 500 or the iShares SPDR S&P 500 (SPY) for the Vanguard Total Stock Market Index (VTI).
