<BreadWithSpam[at]fractious.net> wrote in message
news:yoby787m3gl.fsf[at]panix1.panix.com...
- quote -

FWIW, while this will work for some Vanguard index funds, you can't do this
for an S&P 500 fund (the OP's question), because Vanguard has no license
(from Standard and Poors) to offer ETF class shares of its S&P 500 fund.

Also, the conversion must be handled correctly by the broker (for Vanguard
funds with ETF and retail share classes); otherwise the swap is still a
taxable event. Fractional shares may be problematic.

Here's a letter from a Vanguard attorney to the SEC, which among other
things, describes how and why this conversion works as a non-taxable event
(see section H):
http://www.sec.gov/divisions/marketr...5-incoming.pdf

Mark Freeland
BnetOnewsX[at]sbcglobal.net

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"Bill" <no[at]no.com> writes:

- quote -

I've just thought of a case where such an exchange may be
allowed - if both the fund and the ETF are just different
share classes of a single fund. The only place I know of
where that's the case is at Vanguard. But just as one
may swap "investor shares" for "admiral shares" if one's
account is large enough, and do so without any tax
consequences (or just as one may exchange "b" shares of
a load fund for "a" shares"). That's actually called
a "conversion" and not an "exchange".

(another time when something similar happens is when
one fund is merged into another - shares of the first
get converted into shares of the second when the assets
of the first are merged into the portfolio of the second)

Anyway, after my comment last night about the topic
having been fully addressed before I changed it, this
occurred to me. It's probably doesn't apply to many
folks, but it is something of an exception to the rule.


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"Rich Carreiro" <rlc-news[at]rlcarr.com> wrote in message
news:m3zlsn7cwd.fsf[at]swing-shift.time-tripper.com...
- quote -

personally, I think a "final decision" is made by a court of law.
Preferably the Supreme Court, but a few Appellate courts in agreement will
do.

The "final" IRS position on expensing roofs is, well, just wrong.

I make no inference with regard to the present issue in this thread, just
making a comment on "final decision".

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BreadWithSpam[at]fractious.net writes:

- quote -

Define "final and authoritative".

Very recently (December, I believe) the IRS *finally* issued its
official position. See Rev. Rul. 2008-5.

As expected, the IRS position says it's a wash sale. Not only that,
the disallowed loss is forever lost, not merely deferred.

--
Rich Carreiro rlc-news[at]rlcarr.com

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Mark Bole <makbo[at]pacbell.net> writes:

- quote -

It was. I thought the original topic had been closed very
quickly and decisively by you already, though. (And, thanks,
by the way).

If there was further uncertainty about the original
question, I apologize if I've derailed that.

- quote -

And some of the asymmetry of treatment of gains versus losses.
(ie. they can force you to postpone losses but don't allow
you to postpone gains)

- quote -

True enough.

As far as the wash sales, I still haven't seen any
final and authoritative answer regarding if one sells
for a loss in a taxable account and then buys back
inside an IRA. I've read that it doesn't count because
either (a) you and the IRA trust are distinct legal
entities; and/or (b) because the IRA is treated differently
for taxes anyway. The Smartmoney article doesn't even
seem too certain ("however, there is apparently nothing
to prevent you..."). I thought we'd discussed this
here before and can't recall any decisive conclusion.



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Augustine wrote:

- quote -

Disclose your position and start the clock on the statute of limitations.

With all due respect to BreadWIthSpam, the original topic of the thread
has been diverted to wash sale rules. I think he was trying to contrast
the different treatment of like-kind exchanges of business/investment
property with wash-sale rules regarding "paper losses" on securities sales.

No one ever said the tax laws were internally consistent!

-Mark Bole

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On Mar 24, 7:46 am, BreadWithS...[at]fractious.net wrote:
- quote -

How does one deal with such IRS rules that leave particular situations
out?

How about doing the same with a sector ETF, say sold EPP to buy PAF?

Thanks.

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Mark Bole <makbo[at]pacbell.net> writes:
- quote -

Yet if the SP500 fund were sold at a loss and the SP500 ETF
were then purchased within 30 days, it'd probably be
considered a "wash sale" and you wouldn't get to recognize
the loss.

<http://www.smartmoney.com/tax/capital/?story=washrules
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Bill wrote:
- quote -

Yes. Stocks and other securities are excluded from like-kind exchange
rules.


-Mark Bole

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Am I correct that I cannot do a "like kind exchange" under the IRS
regulations to exchange shares in an S&P 500 mutual fund for shares in
an S&P 500 ETF?

--
..Bill.

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