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Financial Planning / Tax Strategies


Subject:  Re: Capital Gains: Stocks vs. Mutual Funds Date:  5/2/1997  1:26 PM
Author:  tmftaxes Number:  10 of 123019

On Fri, 02 May 97 09:44:00 -0600, JeanDavid wrote:

I bought a closed-end mutual fund in about 1967 that

traded as a stock on the NYSE. I re-invested capital gains.

Now capital gains on stocks can be evaluated

FIFO or identified lots method. I took delivery of all the

stock certificates. Sometime in the 1970's or 1980's the

fund changed to an open-end fund for which the average-cost

method is used for computing capital gains.

Last year I sold some of the shares represented by the

certificates by sending them to the fund requesting that

they be sold. Considering them as a stock, I used the

FIFO method of computing capital gains. Since that time, I

have sold all the shares I bought as stock in closed-end

mutual fund. I hope this was legal. Does the IRS consider

those shares as stock (since I bought and sold them that

way), or a mutual fund, since that is what the new

corporation is?

I now have only the shares represented by

the reinvested dividends and capital gains. When I sell

these, I assume I will use the average cost method to