The National Directory of Certified Public Accountants

Ask A CPA - Mutual Funds

How Can I Have Taxable Capital Gains On A Mutual Fund When The Value Of The Fund Is Worth Less Today Than It Was At The End Of Last Year ?

Fund managers buy and sell stocks throughout the year. When the managers sell stocks with a large gain, that share of the capital gain must be allocated to you and everyone else in the fund, even though the balance of the portfolio includes unrealized losses and the fund is down in value.

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