Chuckanut
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
We seem to be at risk for paying capital gains tax while our funds have dropped in value. IIRC, this is not the first down market that has left coal in our stockings after a down year.
https://humbledollar.com/2022/12/a-taxing-situation/
https://humbledollar.com/2022/12/a-taxing-situation/
Even in a down year for stocks and bonds, a mutual fund may realize capital gains, which are then passed on to shareholders. These could come as a nasty surprise to investors already smarting from 2022’s steep losses.
This year, many investors appear to have sold their actively managed funds. These sales force a fund’s manager to sell stocks to generate the cash needed to pay off departing shareholders. That creates a tax conundrum, because many funds hold stocks that enjoyed significant gains in 2020 and 2021. Selling these appreciated assets produces a capital gain. The fund can offset these gains by selling stocks at a loss. But as more people bail out of a fund, the manager may run out of losses to realize and instead must sell winners to generate cash.
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