A Couple of Mutual Fund Tax Questions

[HappilyRetired]

VOO is an ETF and does not distribute Capital Gains. Only dividends. So depending where your VOO resides , you would not be surprised with Capital gains to be taxed. VFIAX is a mutual fund where capital gains are gained each year (twice a year). And dividends awarded quarterly. So if in a taxable account, even if the fund lost pricing per share, you will be taxed on the gains. GLTA

 

[TheWizard]

By exchanging VFIAX to VOO is there a Tax saving?

No tax savings, but a slight reduction in ER from 0.04% to 0.03%. Plus the real-time trading benefits of an ETF...

 

[TheWizard]

VOO is an ETF and does not distribute Capital Gains. Only dividends. So depending where your VOO resides , you would not be surprised with Capital gains to be taxed. VFIAX is a mutual fund where capital gains are gained each year (twice a year). And dividends awarded quarterly. So if in a taxable account, even if the fund lost pricing per share, you will be taxed on the gains. GLTA

Neither VFIAX nor VOO have Capital Gains Distributions, just dividends...

 

[HappilyRetired]

Neither VFIAX nor VOO have Capital Gains Distributions, just dividends...

I stand corrected! You are correct wizard. I confused VFIAX with my other mutual fund VGIAX and which does disteuvture capital gains! Thank you!

 

[TheWizard]

I stand corrected! You are correct wizard. I confused VFIAX with my other mutual fund VGIAX and which does disteuvture capital gains! Thank you!

It's a Vanguard thing, HR.
Equivalent ETFs and MFs have the same distributions. And most (all?) of those are index funds.

Of course, Vanguard has a lot of managed MFs with no equivalent ETF. That's a different situation...

 

[Bruno]

I stand corrected! You are correct wizard.

and that is why they call him the WIZARD!!

 

[pb4uski]

^^^ Mr. Wizard to you Bruno.