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Author: jsjbuck Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120820  
Subject: New fool needs clarification Date: 12/5/2000 1:14 AM
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This is my first post. Prior to stumbling upon "The Motley Fool Inveatment Guide" earlier this year, I invested in managed mutual funds. The other day I found out(through Bill Mann's "Fund owners: prepare for Pain" 12-1-00) that even though I have lost(non-qualified)money on all of my funds this year(except Weitz Value), I will need to pay taxes on the capital gains that others have realized! I heard that I could legally AVOID paying taxes on these gains if I sell these funds before the end of this year. I recognize that I will, of course, take a loss upon selling these funds, but I could use this loss to offset my ordinary income tax liability and carry the excess loss forward to offset future capital gains. Is this true? If so, do I need to liquidate these mutual funds before the fund company's fiscal year-end or before the fund company sends me a notice to pay the taxes? Or do I simply need to liquidate these funds before December 31? A guy at Schwab told me that I got it all wrong. He said that I would need to sell the funds if I wanted to use the loss to offset the taxes from the mutual fund capital gains. He said there is no way I was going to AVOID paying taxes on the capital gains by simply selling the funds before the end of the year. Is he right? Can some out there help me with this? Thanks, Buck
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