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Executing on Tax Loss Harvesting for End Of Year

I am sure a large amount of people are just like me wondering what, if anything, they should do as the year closes out to take full advantage how much you owe in taxes. I know this is the first year I have learned about the Financial Independence movement and I am excited to document what I am doing so I can look back on it a few years from now and thinks of many mistakes I made.

Step 1: Look at all my taxable accounts to see how everything has performed for the year. This has been a terrible end of the year for the stock market, BUT this is exactly what I was hoping would happen early on in my path to financial independence. The more I continue to dollar cost average and continue purchasing index funds while the market goes down, the more shares I will buy.

Account 1: Vanguard Holdings

Now let’s look at how the actual accounts did to see if we have any room to do some tax optimization!

Taxable Account Total

Well that is a part of the game. Total losses for first taxable account: -$19,887.52

Now time to look at my E Trade account:

One of the biggest mistakes I made over the course of my investing has been getting into BitCoin. Looking back, I was a dumb and naïve young investor and I have tried to turn it around for the better. I have sold all my shares of the GBTC, but unfortunately lost over $8k in the stock…this isn’t to mention what I lost in actual purchasing of Bit Coin.

Bitcoin Loss

Now to look at my current positions on my E-Trade account:

E Trade Pic 2

The only stocks that I am going to be able to sell and re-buy to increase my Cost Basis are going to be CF (+$255.85), GNKWF (+$5.80), and WMT (+$1,046.55).

  • Total Gains: +$1,308.20
  • Total Losses: -$10,525.32


Total Taxable Accounts Summary

Account Gains/Losses
Vanguard -$19,887.52
E-Trade -$9,217.12
Total -$29,104.64

Step 2: Now that I have a good understanding of how my accounts have performed, I need to determine the best next steps to take. From my understanding of tax loss harvesting, there are three main things I can do. First, I am going to ensure dividends are not automatically re-invested to prevent a wash sale. A wash sale, from my understanding, is an elimination of getting any tax benefits if you sell something for a loss and then immediately buy it or something like it back. If done you would not be able to harvest any losses for tax purposes. Second, because all my vanguard account is invested in VTSAX, I am going to find another fund I can purchase that will prevent a wash sale. After doing some research, the fund that I have decided to purchase is VLCAX. This is the Vanguard Large Cap Index. From everything I am reading these two funds are different enough to ensure the IRS would not see this as a wash sale. Now it is time to sell my VTSAX and buy VLCAX in each account. Third, I will sell any accounts I have made a gain on and re-purchase the individual share. This will be very easy this year as there aren’t many shares I have made money on.

Selecting all the available shares from my VTSAX taxable account. Note I have setup my account to be able to sell by individual times purchased in order to better harvest gains/losses.

Vanguard Pic 2

Moving investment to VLCAX

Vanguard Pic 3

Step 3: Purchase back the VTSAX fund after 31 days to ensure it isn’t considered a wash sale. Since today is Christmas and the markets are closed, the actual purchase of the fund will happen on 12/26 meaning that I can purchase the shares back on 1/28/19. This will ensure I can take advantage of tax lost harvesting.

Step 4: Coming home for the holidays, I found out that I also have a large amount of bonds relatives purchased for me years ago. After doing some research I found that bonds are treated as capital gains if you sell them before the full maturity date. Since I have so much in losses that I can harvest, I can offset some of the losses by all the gains from the bonds. This is the perfect year to do this because I will still have losses after accounting for the interest earned on the bonds. Below is a snapshot of the bonds I have. I found the estimated value of the bonds at this website by putting in the bond number and issue date:

Bond Pic

So now I will be able to claim $4,324.64 in gains from interest earned on the bonds.

Full Summary: I know this post has a lot of content in it so I am going to do a really high level overview of what I have done and provide specific numbers

  1. Determined total amount of gains/losses in my taxable accounts
    1. $19,887.52 in losses from Vanguard
    2. $9,217.12 in losses from E-Trade
  2. Looked for a Vanguard fund to purchase after selling my VTSAX to prevent a wash sale. Landed on purchasing VLCAX.
  3. Sell any taxable account stocks that have increased in value from my E-Trade account
    1. I will end up selling and re-purchasing CF (+$255.85), GNKWF (+$5.80), and WMT (+$1,046.55) for total gains of $1,308.20
  4. Sell positions in bonds I currently hold to harvest gains of $4,324.64


Tax Implications:

Accounts Gains/Losses
Vanguard  $ (19,887.52)
E-Trade  $   (9,217.12)
Bonds  $     4,324.64
Total  $ (24,780.00)
  • Able to reduce taxable income by $3,000 for this year based off current tax limitations. Since I am in the 24% tax bracket, this will save me $720 in taxes this year
  • I will be able to carryover $27,780 of losses going into the future so this will be able to save me more money in the future. I think I will be in the 35% tax bracket for next year, so if I max out $3k/year then I will be able to take the max amount of losses for the next 9 years. This means I would end up saving $1,050 per year for the next 9 years totaling up to $9,450!

Dang, putting this together was a lot of work but I really hope someone can read through it and action on some of the things I did. Please note that everything outlined here is what I have done. I am by no means advocating others to do this or giving tax advice. I am just documenting exactly what I am doing in order to try and reduce my taxes this year!

Let me know what you think and how you are going to crush the game in taxes closing out this year!

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TheYoungRetireeBy33 Entering the Blogosphere

DANG, it has been a little over 3 months now since I first found the Financial Independence community. I cannot believe that I am finally doing this. We are actually about to go on this journey together and I cannot be more ecstatic about it! I have come so far, yet I have just started on my path to true financial independence. I would like to set the stage for this blog and start the first post with a little background about myself and what I hope to get out of this blog.

Who am I? I am just your everyday average Joe who is 26 and currently living a great life. To be clear to anyone who stumbles across this blog, I am not retired at this point in my life. I wanted to create the name TheYoungReitreeBy33 as it is catchy and it outlines my goal to be financially independent by 33. I grew up in a very nice household having two amazing parents who were hardworking and always taught my older brother and I the core values of respect, hard work, and above all else to always give back to others. I have had a crazy and eventful life up to this point. I will go into much more detail in a later blog post, but for the time being, I have had the opportunity to live across the US from Dallas to Buffalo to Fayetteville, AR to Bethlehem (the holy land 😉), PA to Orlando. My career and schooling have given me this great blessing and I wouldn’t change anything for where I am currently at in my life.


Why Create a Blog? The question that I have continued to ask myself now for a few months. I have been debating on whether to create a blog to track my journey or just continue down the path without sharing anything. I think the main reason I am going to take a leap out and do this is because I want to hold myself accountable. Whether nobody ever reads any of my posts or I have the privilege to reach hundreds of readers, I am excited to follow-through with this. There have been too many times in my past where I would start something but never finish it. Time to see where this path to FI will take me and to document all my steps along the way.


What I Plan to Share? The main point of this blog will be to document my path from knowing absolutely nothing about the Financial Independence community to working my way to Financial Independence Optional Retirement (FIOR). I heard this term on a podcast I listened to a while back and it really resonated with me. There are a ton of people who are all about the FIRE movement (and I love that they are all about it!!) but I want to ensure people understand exactly what I am going after.


What Are My Goals? I have so many different goals it is hard to write them all down here in a concise condensed down version, but I will write out what I currently read every morning during my Miracle Mornings.

  1. I commit to becoming financially independent where my investments will be able to sustain my spending levels by the age of 33 no matter what. There is no other option.
  2. I commit to save 75% of my take-home pay each month no matter what. There is no other option.
  3. I commit to engage in more conversations with random strangers to learn about all the unique people there are in this world no matter what. There is no other option.
  4. I commit to engage in random conversations with girls I have never met no matter what. There is no other option.
  5. I commit to work out twice a day no matter what. There is no other option.
  6. I commit to eat healthy foods in which keep me energized and alert no matter what. There is no other option.
  7. I commit to read 2 Mr. Money Mustache articles each day no matter what. There is no other option.
  8. I commit to read 2 books per month no matter what. There is no other option.
  9. I commit to listen to 1 Impact Theory or related video every day no matter what. There is no other option.
  10. I commit to use the counting down from 5 method once a day no matter what. There is no other option.
  11. I commit to track my finances at the end of every month no matter what. There is no other option.
  12. I commit to empty my mind of negative thoughts no matter what. There is no other option.
  13. I commit to meditating at least once a day no matter what. There is no other option.
  14. I commit to doing a Miracle Morning each morning no matter what. There is no other option.


I feel this is a good starting point for setting the stage for this blog and I am very excited and grateful that you have read up till the end of this post! There is a lot more to come on this journey.


Please also follow me on my Instagram account to see when I started tracking my path to FIOR at : TheYoungRetireeBy33