With my method (essentially yours, but "Continue to buy Fund A with new money"), you don't have to worry about the bolded part except for once (right after you sell A). If you're constantly buying Fund B, and a TLH opportunity presents itself, then part of a sale of Fund B would be a wash sale if you bought it within the past 30 days.It's been awhile since I've been able to TLH stock funds, but I have done it differently than you describe. For example I do this:
Depends how long you've held VTI. I'd owned it for less than a year in April 2025 when the brief market downturn happened. I TLH'd out of it and into SCHB. Any new money to be allocated to US stocks goes to VTI now, not SCHB, to avoid a wash sale in case I get the opportunity to TLH out of SCHB. If that happens, I'll own mostly VTI again.
Sell Fund A to harvest losses
Buy Fund B as a replacement
Continue to buy Fund B with new money
---Market crashes---
Sell Fund B to harvest losses
Buy Fund A (making sure at least 31 days have transpired since first sale of Fund A)
This is called making a "round trip" in TLH lingo. It often doesn't work this way and you may end up holding your replacement funds...forever.
It does mean I have two similar funds (at the moment, a lot of SCHB and a little VTI), but that doesn't bother me. One drawback, however, might be that it's more likely that an opportunity to TLH out of Fund A arises because all the purchases are more recent and therefore will tend to have been bought at a higher price than my shares of Fund B. So a downturn in the market might result in a loss of my A shares but not my B shares, so I'd have to be careful to avoid TLHing out of A if I'd bought it within the last 30 days. But in my case, the amount in A is so tiny (relative to the amount in B) that I probably wouldn't care if I missed an opportunity to TLH out of it.
Statistics: Posted by snic — Fri Jan 09, 2026 9:02 am — Replies 22 — Views 1282