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Financial Planning / Tax Strategies


Subject:  Re: Mutual Funds, Capital Gains - I'm lost Date:  7/21/1999  10:39 AM
Author:  pauleckler Number:  17549 of 127522

The greatest hassle with reinvesting dividends and capital gains distributions (and DRIP programs) is the large number of transactions generated. Each share you sell has an associated cost. So your calculation of cost basis can become complex. It is definitely more complicated than if you bought 100 shares of IBM twenty years ago.

A spreadsheet program is an easy way to add up all of those purchases and make sure you have them entered correctly. But you will probably spend a few hours at it if you have owned the mutual fund for years.

Selling accumulated mutual fund shares always makes tax time more complicated. Suddenly tax similification looks more and more attractive.
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