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Subject:  Re: Basic Mutaul Fund/Tax Question Date:  4/12/1998  1:06 AM
Author:  KATinChicagoland Number:  3435 of 127549

I have a further comment on tc001's clarification. I had an extended discussion here a while back with someone who said they had a report indicating that a certain amount of their mutual fund dividend was made up of short-term gain. I was surprised to hear this because there would appear to be no tax reason for them to report this. (Maybe the securities laws require dissemination of this information?) But the person providing this information seemed to be quite clear that this was the case, and that we were not talking about 28% gain (which tc001 correctly identified in his second message as a category of long-term gain). The point is that short-term gain does *not* retain its character when it is distributed by a mutual fund to its shareholders. It is taxed as ordinary dividend income -- a point that brought woe to the person who asked the earlier question because that meant it could not be offset by a large capital loss in the same year.

KAT in Chicagoland
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