Taking advantage of economic downturn

[sea-tax]

Same fund different share class wash sale rules apply.

Two large cap us growth funds one from OPPY and one from American Funds, no wash sale.

My humble opinon.

[Skate1968]

Thanks for everyone's input on this.

There are so many investments out there. I think it would be fairly easy to find a new investment which was not 'substantially identical' -- and not subject to the wash sale rules.

I would say a different fund family with different managers and different top holdings would be the way to go.

I agree. It seems that you'd be very safe with this approach even under audit.

From Pub 564

Substantially identical. In determining
whether the shares are substantially identical,
you must consider all the facts and circum-
stances. Ordinarily, shares issued by one mu-
tual fund are not considered to be substantially [identical to shares issued]
by another mutual
fund.

The word "ordinarily" makes me cautious.

Perhaps an exception to "ordinary" would be something like two Fortune 100 index funds mananged by different fund families. They are both intent of mimicing the asset allocation of the Fortune 100 as closely as possible. Therefore they're both substantially identical. I also think that two muni bond funds might easily be deemed 'substantially identical' by an IRS agent.

[DonPriebe]

Perhaps an exception to "ordinary" would be something like two Fortune 100 index funds mananged by different fund families. They are both intent of mimicing the asset allocation of the Fortune 100 as closely as possible. Therefore they're both substantially identical.

But even then their results may differ. The five year average returns of the Fidelity and Vanguard S&P 500 index funds differ by 0.02%. That might not be 'substantial' to me, but if I had a million dollars invested ....