"Tax Free"

[paulk]

Mark

I see there is now an option to code an entire portfolio as "tax free". Is there also an option to have wash sale calculations apply only to those portfolios which are not marked tax free? I ask because TD Ameritrade (and I believe most other custodians) do not apply the wash sale rules to tax deferred accounts like IRAs. I think if I use the wash sale rules in FM it is a global preference correct?

If so, maybe an enhancement to a future version to allow for wash sale calculations to be applied to taxable accounts only?

Thanks

[Mark]

Hi paulk,

Where specifically are you looking to not have wash sale rules applied? If an investment is marked as tax-free, then by default it won't be included in the Capital Gains report, so wash sale rules won't be relevant since these investments aren't being included.

[paulk]

So if I mark an entire portfolio as "tax free" it will be excluded from all capital gains reports and thus the effect of wash sales will be removed correct?

In essence I am trying to reconcile my cost basis per FM with the cost basis carried by TD Ameritrade. TD does not apply wash sale rules to nontaxable accounts. FM doesn't differentiate.

[Mark]

Yes, this is correct. You might want to double check that "Options / Report Preferences... / Capital Gains / Exclude Tax Free Investments" is checked. You can also look at the report, and make sure you don't see any of these investments listed.

[paulk]

Thanks Mark. Just one more question and I think I am done. If I mark an investment as "tax free" in one account that will not make it tax free in every account it is held in will it? I have many funds held for clients in both taxable and tax free accounts.

[Mark]

Hi paulk,

Yes, this is correct. Every investment has separate properties.

[paulk]

Mark

As a follow up I did as you suggested and marked one of the portfolios in question as "tax free". I then checked the capital gain report option to exclude tax free investments. A capital gain report then generated not results for that account which is what I would have expected. However, on my custom report where I track basis my Tax Basis Avg (end) field is still calculating inclusive of the effect of the wash sale adjustment. I assume that field does not follow the "exclude tax free investment" command? In other words, is there no way to exclude the effect of a wash sale when calculating that specific field in a specific account?

[Customer Support]

Due to vacation, technical support will be unavailable until Monday May 16th. We will reply to your post on Monday.

[paulk]

You are certainly entitled! Have a good vacation!

[Customer Support]

Hi paulk,

Yes, unfortunately you can't turn off wash sale rules on a per-investment basis. It is a global option to use or not use wash sale rules. It sounds like you would like to see 2 wash sale options instead of one, maybe something like:

Use Wash Sale Rules on Taxable Investments
Use Wash Sale Rules on Tax-Free Investments

So, you could set them independently. Does this sound like it would satisfy your requirements? This is something we can consider for a future update.

[paulk]

Mark

Yes I believe that would work. This way I could specify that "nontaxable" accounts would not be subject to wash sale rules while accounts not marked "nontaxable" would have the wash sale rules apply.

Thanks!

[Mark]

Hi paulk,

Okay, thanks for the feedback.