I’ve seen this brought up before, but I want to know what people think right now. If I sell VOO and take a $20k loss in today’s downturn, then buy SPY right after, would it count as a wash sale? Are these ETFs too similar for it to work?
Also, if it is considered a wash sale, does the broker flag it on my tax forms, or do I have to figure that out myself? Appreciate any input here.
Sell VOO and grab VTI instead. They’re close enough, and you’ll sleep easier. Just switch back to VOO after 30 days.
You mean 31 days.
Fine, 32 days if you’re being super cautious.
Go for 33 days just to be ultra-safe.
33 is a bit much. 32 is already mega cautious.
It’s not considered a wash sale right now. The IRS might argue otherwise in an audit, but I’ve never heard of this happening. Most people switch to funds tracking a slightly different index, like SCHX, which behaves almost the same as VOO.
After 31 days, you can always sell SCHX and go back to VOO if you want, but honestly, there’s very little difference between them.
My tax professor used to say, if you can make it pass the straight-face test, you’re fine. Swapping VOO for SPY for 31 days and back might raise eyebrows, but switching to SCHX or something similar and holding it a while is less suspicious.
Appreciate the insight!
I know a bit about wash sale rules. Technically, VOO and SPY are very similar, which could make it risky. But the IRS hasn’t given much clarity on what ‘substantially identical’ really means, and they don’t seem to enforce it heavily.
Worst-case scenario: if you’re audited, you might owe the difference plus interest. Someone mentioned VTI earlier—that’s a safer move if you’re worried.
No, selling VOO and buying SPY hasn’t been flagged as a wash sale historically. But if you want to be extra cautious, switch to VTI for 31 days and then back to VOO. The difference in returns over 30 days is negligible.
Wouldn’t you pay short-term capital gains on VTI if it gains value in those 31 days?
It’s possible, but the gains would be small. If you have long-term losses, they could offset it. Personally, I just switch between similar funds like VOO to SPY without worrying.
Doesn’t matter if OP’s VOO losses are short-term. This discussion would be irrelevant then.
This just sounds like regular tax loss harvesting to me.
VOO and SPY aren’t considered substantially similar, so it wouldn’t count as a wash sale. If there’s a wash sale, your broker should track it for you, but it’s ultimately your responsibility to report it properly.
They’re pretty similar, so it’s a bit risky, but you’d probably get away with it.
Just wait at least 30 days to be safe. Some folks call it the 60-day method for extra caution.
Currently, it’s not flagged as a wash sale. If you’re worried, use VTI instead of SPY. Your broker will notify you if there’s a wash sale, but switching to VTI is a safer move.
Switch from VOO to VTI to play it safe.