Tax implications liquidating mutual funds shropshire fish dating
A "wash sale" occurs if you sell an investment and purchase the same or a "substantially identical" investment within 30 days before or after the sale.For example, if you sell your mutual fund to buy Christmas presents and then repurchase the fund after the start of the new year, you might be in violation of the wash sale rule, which will prevent you from deducting any losses on the sale of the fund from your taxes.As of 2010, capital gains tax amounts to 15 percent.For many investors, ordinary income tax rates on short-term gains exceed the long-term capital gains tax.
These re-investments add to the investor's cost basis, but people often overlook this when calculating capital gains, and overpay their taxes, because they only deduct their initial investment from the sales price.
Investors buy and sell mutual funds traded on the New York Stock Exchange throughout the year.
The Internal Revenue Service (IRS) assesses taxes on the proceeds of many mutual fund sales.
Shareholders who sell mutual fund shares for profit, having held the shares for more than one year, receive long-term capital gains.
The gains are the difference between the cost basis, or purchase price, and the sale price of each share.