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Mutual funds: Mutual funds are required to report cost-based information to investors and the IRS, making it easier for shareholders to calculate their capital gains or losses when they sell shares.
In general, ETFs are more tax efficient than mutual funds in three ways: ETFs buy and sell assets within the fund using “creation units”– meaning the fund will batch purchases and sales, and ...
As a mutual fund owner, you may have to pay taxes on any income your shares generate. But how are mutual funds taxed when you sell? Being aware of your tax obligations whe you own a mutual fund can...
Basis (or cost basis), as used in United States tax law, is the original cost of property, adjusted for factors such as depreciation. When a property is sold, the taxpayer pays/(saves) taxes on a capital gain /(loss) that equals the amount realized on the sale minus the sold property's basis.
The Modified Accelerated Cost Recovery System (MACRS) is the current tax depreciation system in the United States. Under this system, the capitalized cost (basis) of tangible property is recovered over a specified life by annual deductions for depreciation. The lives are specified broadly in the Internal Revenue Code.
Operating a mutual fund involves costs, including shareholder transaction costs, investment advisory fees, and marketing and distribution expenses. Funds pass along these costs to investors in several ways. Some funds impose "shareholder fees" directly on investors whenever they buy or sell shares. In addition, every fund has regular, recurring ...
Capital gains: The fund manager may sell securities in the fund for a profit, triggering a capital gains tax. The tax impact will depend on how long the fund held the shares that were sold.
The loss is not recognized at the time of the transaction, but must be carried forward in the form of a higher basis on the property received. 1031(d) defines the basis calculation for property acquired during a like-kind exchange. It states that the basis of the new property is the same as the basis of the property given up, minus any money ...