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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.
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.
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.
7. Cost or other basis* $10,000 8. Business/investment use: 100% 9. Multiply line 7 by line 8: $10,000 10. Total claimed for section 179 deduction and other items-0- 11. Subtract line 10 from line 9. This is your tentative basis for depreciation: $10,000 12. Multiply line 11 by .50 if the 50% special depreciation allowance applies.
A non-simultaneous exchange is sometimes called a Starker Tax Deferred Exchange, named for an investor who won a case against the Internal Revenue Service (IRS). [ 3 ] For a non-simultaneous exchange, the taxpayer must use a Qualified Intermediary , follow guidelines of the IRS, and use the proceeds of the sale to buy qualifying, like-kind ...
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 ...
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.