Can you sell shares before ex-dividend and buy back after, to replace 'dividend income' by 'capital gains'?
Can you sell shares before ex-dividend and buy back after, to replace 'dividend income' by 'capital gains'?
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Aganju · External communityPost link
External question — Personal Finance Stack Exchange
Author: Aganju
Original post: https://money.stackexchange.com/questions/158285
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
Note: this is the opposite direction than most sell/buy questions over dividend day.
Here is the situation: I have large losses from unrelated trading activity, and can only deduct 3000 per year from income.
I am considering to sell large amounts of short-term bond ETF investments (for example VUSB) right before the ex-dividend day, and buy them back right afterwards, repeating this every month-end (they pay dividends/interest every month). This results in a monthly capital gain that should be roughly equivalent to the avoided dividends, but
it is combinable with the pending losses
! - which the dividends/interest is not.
This way, I should be able to reduce my taxable income by more than the normal 3000 limit (using up some 'losses' instead of moving them in future years).
Is there any problem with this, or would this work?
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Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: Aganju Source score (net votes, not local likes): 1 Original post: https://money.stackexchange.com/questions/158285 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Note: this is the opposite direction than most sell/buy questions over dividend day. Here is the situation: I have large losses from unrelated trading activity, and can only deduct 3000 per year from income. I am considering to sell large amounts of short-term bond ETF investments (for example VUSB) right before the ex-dividend day, and buy them back right afterwards, repeating this every month-end (they pay dividends/interest every month). This results in a monthly capital gain that should be roughly equivalent to the avoided dividends, but it is combinable with the pending losses ! - which the dividends/interest is not. This way, I should be able to reduce my taxable income by more than the normal 3000 limit (using up some 'losses' instead of moving them in future years). Is there any problem with this, or would this work?
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