Ridiculous Restrictions from Financial Institutions (and ways to defeat them legally)

IRS

31 day wash sale rule - cannot repurchase a stock or similar mutual fund within 31 days or it negates the writeoff

Ways to defeat: Tax Loss Harvesting - you sell a down mutual fund and buy a “significantly” different fund the same day. With respect to the IRS, the VG Total Stock Market(TSM) and SP500 index funds are significantly different, even though they track eachother at 98% similarity because although TSM holds 5000 stocks, over 80% of it is the SP500 and the remaining 20% have strong correlation to the SP500. You get the loss but maintain market exposure so you don’t miss a potential rally.

Paypal(PP)

has carte blanche in pulling ACHs from linked checking account. This has caused me numerous overdraft charges from my bank, and even though PP reverses the fraudulant transactions, they do not compensate me for the overdraft fees from my bank.

Ways to defeat: After enrolling your checking account with PP, immediately close the account with your local bank. PP requires a linked checking account to be verified in order to work. Then add a second checking account but NO NOT verify it. PP will let you withdraw funds through ACH to the unverified second checking account, but as long as the primary checking account linked is closed at your bank, then PP cannot screw you over.

Checking Account Direct Deposit Requirement

Some banks require direct deposit into a checking account to qualify for free/reduced fees and/or reward dividends. Depending on the institution, this may be done by doing an ACH push from another bank, once a month. Perhaps if you own a MMF at VG, for example, you can set it to automatically deposit monthly dividends into external account - being the checking account you need a DD in. This works on some banks and not others.

Vanguard

60 day restriction on buying any mutual fund after you sell any portion of it:

Ways to defeat: - Setup a one-time automatic transfer from your VG MMF to the mutual fund you want the buy. The intention of automatic investments are that you could dollar-cost average, for example, $100 every month out of your paycheck into a mutual fund. However VG lets you set the frequency interval to “one time” so in essence you have a direct purchase and not an automatic recurring investment. If they ever stop allowing this option, you could simply setup a time interval of monthly and then discontinue the option after the first investment was made. Note that automatic investment purchasing is exempt from the 60 day restriction.

If you know more let me know as comments.