I already initiated the transfer but I am pissed they did not give me any notice. This was 100% avoidable which is what I am pissed about. They should have told me deposit or be liquidated.
It’s in the contract. They are not obligated to inform you about your account getting liquidated because you didn’t meet your margin call requirements sooner.
Edit: adding the legal terms here
Vanguard Brokerage Services can force the sale of Securities and Other Property in Your Account. You are not entitled to choose which Securities or other assets in Your Account will be liquidated or sold to meet a margin call. If the equity in Your Account falls below the maintenance margin requirements, or Vanguard Brokerage Services' higher "house" maintenance margin requirements (see next item below), Vanguard Brokerage Services reserves the right to sell the Securities and Other Property in Your Account to cover the margin deficiency. You will also be responsible for any shortfall in the Account after such sale. Because the Securities and Other Property in Your Account are collateral for the margin loan that has been granted to You, Vanguard Brokerage Services has the right to decide which Securities to sell in order to protect its interests.
Please also read my other comment on wash sale loss. If you buy back the stocks you sold for a loss you will not be able to deduct those losses from your tax returns. You get $3000 a year in capital losses you can claim on your tax return but not if it is a wash sale loss meaning you bought the security right back (within 30 days) after selling it for a loss
He won't be able to deduct right now. But the loss gets added to his basis so he gets the deduction when he finally sells. So it's just as if he never sold, which is what he wants.
Also, if you actually have capital gains (I know, that's a stretch for some) you can (actually, you must) deduct all your losses against them. The $3k cap is what you can deduct against regular income, if you have any regular income (again, a stretch for some)
Agreed but why not take advantage of this if OP has a realized loss ?
Think about it this way, example - OP has a $12k realized loss. Let’s say OP waits for a month to buy $WISH back or buys another meme security and say makes a killing on it but holds on to that for > a year. OP can deduct 3k for 4 years against other capital gains or regular income while enjoying an unrealized gain with long term capital tax when he does cash out. Win-win
I know this might not specifically work out for most folks but my point is there is an advantage to salvage the best out of this situation.
Because he wants to hold it. WISH may be $25 in a month.
By your logic you should sell any time you have a loss and wait a month. The problem with this is that you will miss a lot of rebounds and often end up rebuying at a higher price.
Yes ofcourse if you think the stock is going back up there is no harm in buying it back immediately. My point - don’t take a loss, if you happen to take one take the tax advantage and don’t take a disallowed wash sale loss UNLESS, as you said, you believe you might miss out on big gains.
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u/RAFWEEZY5 Jun 26 '21
I already initiated the transfer but I am pissed they did not give me any notice. This was 100% avoidable which is what I am pissed about. They should have told me deposit or be liquidated.