In Episode 2, Justin gets into the weeds of tax-loss selling with ETFs. You’ll learn the core rules to follow, common pitfalls to avoid, and the best “portfolio-tested” ETFs for implementing this tax-efficient strategy. Back by popular demand, the show also features another ETF Kombat, this time with VCN and XIC facing-off in an epic battle you can’t miss. And if you don’t have time to listen to the entire episode, skip ahead to the TLDL (too long, didn’t listen) segment, where the entire episode will be summarized in under five minutes.
Key Points From This Episode:
- Introduction to tax-loss selling [0:00:47.2]
- Why it’s sometimes okay to “sell low” [0:02:38.2]
- Understanding CRA’s superficial loss rules [0:03:36.2]
- Which ETFs are classified as “identical property”, according to CRA? [0:05:47.2]
- Should you worry about the future performance of your replacement ETF? [0:07:30.2]
- Why you need to coordinate tax-loss selling with your spouse [0:09:18.2]
- Why DRIPs can be an investor’s worst nightmare when tax-loss selling [0:11:00.2]
- How diversifying your portfolio managers can “di-worsify” your tax-loss selling strategy [0:11:51.2]
- Should you look for tax-loss selling opportunities year-round, or just in December? [0:12:58.2]
- How big of a loss do you need before selling your ETF? Larry Swedroe’s $5,000 and 5% rule [0:14:03.2]
- Justin Bender’s $10,000 and 10% adjusted rule [0:16:17.2]
- Should you bank losses, even if you have no gains to offset? [0:18:19.2]
- Justwealth’s tax-loss selling strategy, featuring James Gauthier, Chief Investment Officer [0:20:24.2]
- PWL Toronto’s tax-loss selling strategy, featuring Shannon Bender, Portfolio Manager [0:23:09.2]
- ETF Kombat: VCN vs. XIC [0:26:44.2]
- Introducing PWL Toronto’s tax-loss selling ETF pairs: [0:31:33.2]
- Global equity (ex Canada): XAW/VXC [0:32:38.2]
- Canadian equity: VCN/FLCD, XIC/FLCD, ZCN/FLCD [0:35:11.2]
- U.S. equity: XUU/VUN [0:40:21.2]
- International equity: XEF/ZEA [0:41:50.2]
- Emerging markets equity: XEC/ZEM [0:43:58.2]
- Improving your international and emerging markets equity tax-loss selling ETF pairs [0:45:35.2]
- Are asset allocation ETFs ideal for tax-loss selling? [0:49:42.2]
- TLDL (Too Long, Didn’t Listen): A quick summary of the main topics [0:52:40.2]
Blog posts/resources discussed in this episode:
- Part 1: Introducing Tax-Loss Selling (CPM Blog release date: December 2, 2019)
- Part 2: When Should You Sell Your Losers? (CPM Blog release date: December 9, 2019)
- Part 3: Two Takes on Tax-loss Selling: Justwealth vs. PWL (CPM Blog release date: December 16, 2019)
- Part 4: Which ETF Pairs Should I Use When Tax-loss Selling? (CPM Blog release date: December 23, 2019)
- PWL Tax-Loss Selling white paper (updated December 2019) (PWL release date: December 23, 2019)
- As Easy as ACB – Understanding and tracking your adjusted cost base with ETFs
- Combining International and Emerging Markets Equity ETFs
