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The tax man cometh - Mutual Fund Cap Gain Distributions
11-06-2008, 07:39 AM
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#1
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Full time employment: Posting here.
Join Date: Jun 2008
Posts: 534
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The tax man cometh - Mutual Fund Cap Gain Distributions
According to this article it appears many of us will get some salt in our wounds come Jan 1.
5 Ways to Beat the Tax Bite of Mutual Funds: Financial News - Yahoo! Finance
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11-06-2008, 08:09 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Perhaps someone can enlighten me here.
But aren't the bulk of the capital gains due to redemptions then distributed back to those doing the redemption ? For a buy and holder the capital gains hit (if any) should be modest.
please enlighten me as to how this works.
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11-06-2008, 10:46 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Vietnam Veteran, CW4 USA, Retired 1979
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11-06-2008, 10:47 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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Quote:
Originally Posted by MasterBlaster
Perhaps someone can enlighten me here.
But aren't the bulk of the capital gains due to redemptions then distributed back to those doing the redemption ? For a buy and holder the capital gains hit (if any) should be modest.
please enlighten me as to how this works.
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Don't know for sure but I would guess that the gains are distributed equally to all the shares on the record date. If true, that means that the buy and holders also get hit. I know my largest distributions were in 2000 which was the start of the down market.
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11-06-2008, 12:44 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by OAG
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As pointed out in this article, now is a great time to do tax lost harvesting. Sell your depreciated mutual funds and buy back similar holdings. You get a paper loss to offset capital gains and you hold your position for long term gain.
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11-06-2008, 04:06 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Apr 2006
Posts: 1,490
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there is an advantage to paying cap gains taxes early, if rates increase.
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11-06-2008, 04:55 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,499
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Quote:
Originally Posted by MasterBlaster
Perhaps someone can enlighten me here.
But aren't the bulk of the capital gains due to redemptions then distributed back to those doing the redemption ? For a buy and holder the capital gains hit (if any) should be modest.
please enlighten me as to how this works.
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The net realized capital gains, whether caused by changes in portfolio or redemptions, have to be distributed to the fund share-holders. The distribution is split across all the current share-holders.
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