Comment by WalterBright 3 days ago
QQQ is up 5x in 10 years. Being an ETF, that means many of its components must be 10x.
I suppose it's dependent on your time horizon. MSFT is up around 10x since Nadella took over. It's more common over 20 years, obviously.
The IRS disallows wash sale deductions if you reinvest in a substantially similar investment within 30 days.
I'm not an IRS agent and have no idea what they mean by substantially similar. You might want to talk to your tax accountant.
> substantially similar investment
They actually use the word 'identical' instead of 'similar', if that matters. It seems to be a grey area with ETFs, and I'm not a financial advisor, so won't make any further claims.
> You might want to talk to your tax accountant.
Absolutely agreed. You can also just let a reputable robo do it for you if you don't have the time or energy for it, there are multiple. It is what I ended up doing. It's modest but every bit helps.
Indeed, the wording is “substantially identical”, which is important. 2 different ETFs that track similar, but not identical indices (e.g. S&P500 vs Russell 1000 large cap, for example) are clearly not substantially identical, and make great tax-loss harvesting pairs. There’s tons of case law, opinions from tax experts, and automated tax-loss harvesting tools from a variety of brokers that agree with this viewpoint.
Robo advisors are intricately familiar with tax law? That's new to me.
US lets you claim $3k of capital losses each against income, so a robo advisor can optimize for this
Are 'many of its components up 10x'??
Isn't it the case that a few large cap stocks have the vast majority of the growth? If you didn't like Tesla, didn't like Nvidia, didn't like big 5 tech, you might have had very mediocre returns.