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Author: sacob Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121477  
Subject: Closed End Funds Date: 9/24/2005 7:04 PM
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Are closed end funds considered mutual funds or stocks? They are called funds but trade like stocks. On Turbo Tax they separate mutual funds and stocks when you record sales and I'm not sure where to list them.

I am a lurker and it is amazing how many knowledgeable and generous posters there are here. A big thank you to all of you.
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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80835 of 121477
Subject: Re: Closed End Funds Date: 9/24/2005 8:24 PM
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Are closed end funds considered mutual funds or stocks? They are called funds but trade like stocks. On Turbo Tax they separate mutual funds and stocks when you record sales and I'm not sure where to list them.

I'm hoping that this will fall into the "who cares?" category since I'm not sure of the answer in the only case in which I think it matters from a tax standpoint: average cost basis. This is a method of determining basis that's available for mutual funds but not for stocks. Hopefully someone will sail in with a definite answer.

Phil

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80836 of 121477
Subject: Re: Closed End Funds Date: 9/24/2005 8:53 PM
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A closed-end fund (exchange-traded fund, or ETF)is subject to the same rules as an open-end fund (the majority of mutual funds), to be treated as a regulated investment company (which is the tax code's name for mutual funds).

I don't know why Turbo Tax would care, or want to group them separately.

Bill

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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80837 of 121477
Subject: Re: Closed End Funds Date: 9/24/2005 9:51 PM
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Closed end mutual funds are still mutual funds.
If they pay a big annual dividend in January, it counts as income for the previous year. If they were stocks it would count in the year in which you received it.
Best wishes, Chris

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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80838 of 121477
Subject: Re: Closed End Funds Date: 9/24/2005 11:25 PM
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I don't know why Turbo Tax would care, or want to group them separately.

There's different rules for cost basis. Mutual funds are average cost basis (FIFO in holding period), while stocks are FIFO completely. So TurboTax does need to know that.

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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80839 of 121477
Subject: Re: Closed End Funds Date: 9/25/2005 12:09 AM
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I said before: I don't know why Turbo Tax would care, or want to group them separately.
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DelatOne81: There's different rules for cost basis. Mutual funds are average cost basis (FIFO in holding period), while stocks are FIFO completely. So TurboTax does need to know that.

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You're right, as to the different rules. It's been a few years since I used Turbo Tax. Don't you still have to enter the dates, sales and cost basis for each transaction? In othe words, don't you still have to calculate the basis for each transaction?

If so, I still can't figure why they care if it's a regular stock or a mutual fund. You can still be using FIFO, or Specific ID, or single-category or double-category average cost with a mutual fund. And you don't have to enter on the return which method is used.

Bill


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