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Author: hghcpa Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Re: Mutual Funds, Capital Gains - I'm lost Date: 7/13/1999 3:55 PM
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I recently sold off 2 mutual funds to pay the
downpayment on a house I just bought. For arguments
sake, lets say I have 3 other funds that I currently
have money invested in. I sold the two worst
perfoming funds of the 5. However, 1 of the
remaining 3 is also doing terribly (and has been for
awhile).

My questions: Is it worthwhile to sell this 1 fund
and reinvest elsewhere now...or should I wait
until next year to avoid additional taxes?
##############
I would say this would depend on whether or not you have any unrecognized gains in the fund - IE will it sell at a net gain or loss; and whether the first two sales in fact have generated a gain. If there is a net gain from the first two sales and a potential loss from the third you should be able to offset your losses against the gains.

Also, how are taxes figured on mutual funds when
I have been paying taxes yearly on the funds?
(is there an easy way to calculate what I will
be paying?)
#####################
The capital gains distributions you have been receiving on an annual basis have increased your cost basis in the funds as long as you have elected to reinvest those dividends in additional shares (most likely). The mutual fund company should be able to give you your cost basis - ask them for an "average cost basis report" on your shares sold


Also throw in the fact that I'm getting married
in October and have no clue how that will impact
all of this....
#################
Depends on your total combined joint incomes - the 28% bracket starts at approx 42.5k taxable income for joint filers so you will likely pay a higher tax at the joint rates if both spouses have relatively equal incomes. This is called the marriage penalty - and it Stinks.


I apologize if this has been covered elsewhere....I
did look though...couldn't find anything....

(And yes, I know I should probably dump all the
Mutual funds....had 'em a long time though...hard
to get rid of!)
##################
The big transition - Jump in, the water is not too cold and once you get used to it, its a lot of fun.
(as long as the market goes up!!)


PETE
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