What are the tax implications of selling mutual funds?

September 13, 2006

Date:  Fri, 07 Apr 2006
From:  Ray

I would like to consolidate my non-IRA funds from Ameritrade into my non-IRA account at Vanguard. I think the only way to do that is to liquidate, put the cash proceeds into my checking account, and then transfer the funds out of my checking account to Vanguard. As long as I reinvest the same amount I receive from Ameritrade back into Vanguard, are there any tax implications?

Thanks much, Ray


Date:  Fri, 05 May 2006

Hello Ray,

Of course.

There is no such thing as a "tax deferred rollover" except for retirement accounts. Performing the transfer as you describe it will be a taxable sale. If you complete the "rollover" within 30 days and reinvest in the same funds previously held in the Ameritrade account, any losses are disallowed as a wash sale.

Sometimes you can arrange for transfers of the actual funds from one account to the other. Ask the people at Ameritrade and Vanguard if this can be arranged.

Good luck!

Mike Gray

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