Thanks for the reply.A couple thoughts come to mind about question 2.
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If you want to improve the tax efficiency of the international holdings in your taxable account (without abandoning international stock in your taxable account) you could switch to VEA instead of VXUS. This move should help because VEA typically has a higher percentage of qualified dividends than VXUS. In my experience the emerging markets portion of VXUS is the culprit that cranks out more of the non-qualified dividends.
If you want to abandon the idea of holding international in taxable (and put it in tax-deferred), then you might want to read over the wiki page about paying a tax cost to switch funds. At your high marginal rate I suspect there will be some capital gains taxes due when you make the change. That wiki page may help you decide if the switch is worth it.
A third approach is to keep what you've got, but stop reinvesting dividends into more shares. As time goes by, the position will shrink, relative to the other funds you hold in your taxable account - assuming you're still contributing to them.
If/when a tax loss harvesting opportunity comes along, that would be a way to get out of the fund without paying capital gains taxes, but you'd have to endure the inconvenience until that opportunity arises.
Regards,
I used VXUS since I know that's the standard international holding in a 3-fund portfolio but in fact I have most of my international in VEA due to TLH opportunities over the year. That's good to know that I've got more qualified dividends.
You didn't ask but here's the current breakdown of my taxable portfolio:
VEA - 28.19%
VTI - 25.53%
VOO - 19.84%
SLV - 11.7%
VXUS - 3.83%
SCHA - 3.36%
SWVXX - 3.07%
IAU - 2.73%
VV - 1.74%
All my holdings have their dividends set to not reinvest due to my proclivity to TLH. I'm definitely not paying taxes just to get to an ideal situation so even if I decide to put international into tax-deferred/free, it will happen over a few years. I have the ability to pay my state taxes using appreciated stock so that's always an easy way to move out unwanted holdings in my taxable account. Of course I then have a similar issue as I need to figure out whether I want to move out unwanted positions or positions with the highest gains (those two attributes rarely cross).
Statistics: Posted by jaj2276 — Sun Dec 08, 2024 10:36 am — Replies 3 — Views 94