Why the Dow is a useless market index

Re:Why the Dow is a useless market index by obblekk on Sunday April 09, 2017 @03:19PM (#14073880)

I believe this is not allowed by the IRS because ETFs tracking similar indices would be considered 'substantially identical', but I'm not sure [1]. If it is allowed, then you're right - this would be the most efficient way to implement tax loss harvesting.

  A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
 1. Buy substantially identical stock or securities,
 2. Acquire substantially identical stock or securities in a fully taxable trade,

 3. Acquire a contract or option to buy substantially identical stock or securities, or

 4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.

[1] https://www.irs.gov/publications/p550/ch04.html#en_US_2016_p...

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Re:Why the Dow is a useless market index by loeg on Sunday April 09, 2017 @04:11PM (#14074119)

Different indices are not substantially identical.

Different ETFs tracking the same index (e.g., SWPPX and VOO) are likely to be determined substantially identical. (I don't know that the IRS issued guidance on this yet.)

Yes, they choose different indices precisely because of wash sale rules.

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