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Brokers that facilitate mutual fund transactions must follow certain guidelines for setting sales loads. Specifically, FINRA rules cap the maximum sales charge that can be applied at 8.5%. Sales ...
One notable component of the expense ratio of U.S. funds is the "12b-1 fee", which represents expenses used for advertising and promotion of the fund. 12b-1 fees are paid by the fund out of mutual fund assets and are generally limited to a maximum of 1.00% per year (.75% distribution and .25% shareholder servicing) under FINRA Rules.
Taxes on mutual funds when you sell shares. ... You can either use the average cost of all the shares you own to calculate your gain, or you can use specific shares with a specific cost basis.
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.
Often the management fee is initially based on the total investor commitments to the fund (i.e., the fund size) as investments are made. After the end of the commitment period, ordinarily four–six years, the basis for calculating the fee will change to the cost basis of the fund, less any investments that have been realized or written-off.
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...
Buying and selling: Mutual funds: Mutual fund transactions are executed at the fund’s Net Asset Value (NAV) at the end of the trading day. Taxes are typically triggered when gains are ...
The Investment Company Act of 1940 (commonly referred to as the '40 Act) is an act of Congress which regulates investment funds.It was passed as a United States Public Law (Pub. L. 76–768) on August 22, 1940, and is codified at 15 U.S.C. §§ 80a-1–80a-64.