The short answer.
I was wrong. I thought Vanguard’s records must be creating a tax-reporting issue.
But I checked my brokerage 2023 statements vs 1099, and both are in agreement: the Jan23-Dec23 redirected bond dividends are reported as being earned in Feb23-Jan24. So no mistake.
So if Vanguard’s statements and 1099 are in agreement and correct for tax reporting, then there is no problem.
So if I believe there is a problem, then it’s only my problem.
The long answer.
It’s for the purpose of recordkeeping, for tax planning/reporting. (I may be a little OCD.)
As a mutual fund (MF) platform client, I began tracking my investments offline in Excel so I could accurately track/report the sale of uncovered shares.
As time passed, I built many Excel tools to: identify TLH opportunities, track partial lots sold/remaining, accumulate distro (dividends: ordinary, muni national, muni single-state; STCG; LTCG) by month/year to help wag next year's income and tax withholding, external cash flows to help wag investment growth,....
My Excel totals depend upon the month/year each transaction is recorded ...and always matched Vanguard’s statements and 1099 as a MF client.
But my Excel tools stopped working (not an exact match) as a brokerage client when Vanguard reported redirected bond dividends earned in a month ...as being reported as earned in the next month. I thought Vanguard was making a statement mistake, that affected tax-reporting ...since my Excel tools didn’t agree.
But Vanguard is handling tax reporting correctly ...even if I don’t understand the inconsistency of recognizing when dividends are earned.
May test. I changed bonds to reinvest.
--Result.
The May statement showed April redirected (to bank) bond dividends as being earned on May 1st.
But the May statement also showed reinvested bond dividends as being earned/reinvested on May 31st. (The consistency** I wanted.)
Somewhere at Vanguard, the two different tracking methods, for the same dividends, from the same funds ...makes sense.
--Why? Maybe it’s by keeping the dividends inhouse vs sent to a bank, that allows Vanguard to report them as being earned on the same month’s statement. So giving me the consistency** I was looking for.
June test. I've changed bonds to redirect distro to VMFXX. I’m hoping this also works to keep (inhouse) June dividends reported as earned in June.*
--I really can't live with reinvested distro---suboptimal for rebalancing and TLHing.
--I can live with rebalancing from VMFXX vs bank.
* And if it doesn't work, then I’ll resume tweaking Excel to live with my problem.
** "A foolish consistency is the hobgoblin of little minds...." --Emerson.
"I’m a man. But I can change. If I have to. I guess." --Red Green.
I was wrong. I thought Vanguard’s records must be creating a tax-reporting issue.
But I checked my brokerage 2023 statements vs 1099, and both are in agreement: the Jan23-Dec23 redirected bond dividends are reported as being earned in Feb23-Jan24. So no mistake.
So if Vanguard’s statements and 1099 are in agreement and correct for tax reporting, then there is no problem.
So if I believe there is a problem, then it’s only my problem.
The long answer.
Primarily for my own education (though the answer may shed further light on your concern...), I am curious what you do with this information? For example, does the dividend showing up on one month's statement versus the following month give you something to act upon or change your behavior... or is this purely a record-keeping issue?.....* My concern. I want all dividends EARNED for the month (listed as "Pending Transactions") to be LISTED on the statement FOR the month.....
It’s for the purpose of recordkeeping, for tax planning/reporting. (I may be a little OCD.)
As a mutual fund (MF) platform client, I began tracking my investments offline in Excel so I could accurately track/report the sale of uncovered shares.
As time passed, I built many Excel tools to: identify TLH opportunities, track partial lots sold/remaining, accumulate distro (dividends: ordinary, muni national, muni single-state; STCG; LTCG) by month/year to help wag next year's income and tax withholding, external cash flows to help wag investment growth,....
My Excel totals depend upon the month/year each transaction is recorded ...and always matched Vanguard’s statements and 1099 as a MF client.
But my Excel tools stopped working (not an exact match) as a brokerage client when Vanguard reported redirected bond dividends earned in a month ...as being reported as earned in the next month. I thought Vanguard was making a statement mistake, that affected tax-reporting ...since my Excel tools didn’t agree.
But Vanguard is handling tax reporting correctly ...even if I don’t understand the inconsistency of recognizing when dividends are earned.
May test. I changed bonds to reinvest.
--Result.
The May statement showed April redirected (to bank) bond dividends as being earned on May 1st.
But the May statement also showed reinvested bond dividends as being earned/reinvested on May 31st. (The consistency** I wanted.)
Somewhere at Vanguard, the two different tracking methods, for the same dividends, from the same funds ...makes sense.
--Why? Maybe it’s by keeping the dividends inhouse vs sent to a bank, that allows Vanguard to report them as being earned on the same month’s statement. So giving me the consistency** I was looking for.
June test. I've changed bonds to redirect distro to VMFXX. I’m hoping this also works to keep (inhouse) June dividends reported as earned in June.*
--I really can't live with reinvested distro---suboptimal for rebalancing and TLHing.
--I can live with rebalancing from VMFXX vs bank.
* And if it doesn't work, then I’ll resume tweaking Excel to live with my problem.
** "A foolish consistency is the hobgoblin of little minds...." --Emerson.
"I’m a man. But I can change. If I have to. I guess." --Red Green.
Statistics: Posted by dratkinson — Sat Jun 08, 2024 11:40 pm