Selling in tokutei and rebuying in NISA growth

[ChapInTokyo]

I have a couple of ‘buy and hold’ stocks in tokutei on which I have unrealized losses of 12-13%.

I wonder if there are any downsides to selling them and rebuying them immediately in NISA growth, for the tax loss harvest, and tax free dividends going forward?

Any thoughts?

[RetireJapan]

If you weren't going to otherwise use the NISA allowance, why not? You should only be out of the market for a couple of days, and it makes no sense to pay tax when you don't need to.

[adamu]

You don't even need to be out of the market, if you have enough cash to cover the buy order. If you place simultaneous buy/sell orders, you'll buy/sell at the same price with no out of market risk.

You could also theoretically use the loss to offset any gains, if you had them, but I'm not familiar with that.

Of course most people in the accumulation phase are better off with self-reinvesting mutual funds, rather than dividend paying stocks, in a NISA.

[ChapInTokyo]

If you weren't going to otherwise use the NISA allowance, why not? You should only be out of the market for a couple of days, and it makes no sense to pay tax when you don't need to.

Thanks Ben. Turns out I was able to sell and buy the same stock without waiting for the sell order to complete, because NISA orders seems to be accounted for separately from the tokutei account orders.

Hooray! I am now the proud owner of approximatley 280,000 yen of realised losses, to set off against this year's dividends and capital gains.

[ChapInTokyo]

You don't even need to be out of the market, if you have enough cash to cover the buy order. If you place simultaneous buy/sell orders, you'll buy/sell at the same price with no out of market risk.

You could also theoretically use the loss to offset any gains, if you had them, but I'm not familiar with that.

Of course most people in the accumulation phase are better off with self-reinvesting mutual funds, rather than dividend paying stocks, in a NISA.

Thanks adamu! Just the advice I needed to nudge me to action... and I agree with you that self-investing mutual funds are usually better than dividend paying stocks, to buy in NISA if you're still in your accumulation phase.

[captainspoke]

...
Hooray! I am now the proud owner of approximatley 280,000 yen of realised losses,..

bonds?

something due to f/x rates?

[ChapInTokyo]

...
Hooray! I am now the proud owner of approximatley 280,000 yen of realised losses,..

bonds?

something due to f/x rates?

Just stocks in a couple of Japanese companies whose stock prices have plummetted in the last few months.

• DMG Mori

• NOF Corp

[banders]

I’m thinking about doing that as part of my glide into retirement. But how does it work exactly, on both the buy and sell sides with the after- and before- market prices? Do you buy and sell at market price? I'm imagining a scenario where the sell price is accepted and the price spikes before the buy order goes through. The way to avoid that is set a limit order, of course. If so, at which price?

[ChapInTokyo]

I’m thinking about doing that as part of my glide into retirement. But how does it work exactly, on both the buy and sell sides with the after- and before- market prices? Do you buy and sell at market price? I'm imagining a scenario where the sell price is accepted and the price spikes before the buy order goes through. The way to avoid that is set a limit order, of course. If so, at which price?

I usually set limit orders for both buy and sell just so I might get a marginally better price but since I wanted to reduce the chance of either my buy or sell order not going through in this instance, I set my limit price at the last market price so that both the sell and buy orders would execute immediately barring appearance of new information leading to price fluctuation intra day. One advantage of selling in tokutei and buying in NISA that I hadn't realised before doing it is that because the cost basis is not averaged between the two acount types, you do not have to wait a day between the sell and the buy on the same stock. This makes it more likely you'd be able to re-buy at more or less the same price I think.

[adamu]

For funds, it is exactly the same price.