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"In a taxable account you would have to pay taxes on the distribution, so its better to wait until just afterwards.

That is true, but is generally a once per year phenomenon, not a monthly one like the OP was talking about."

Oh how I wish that distributions were no big deal. But last Friday, Fidelity did a susprise 18.33% distribution of Fidelity Magellan! An unbelievably large distribution which DOES cause me a big, unplanned tax problem. We have about $65K in Magellan in an after tax account (have NOT reinvested dividends for many years, but did not want to sell for some time as it was tracking close to the SP500 and I did not want to pay cap gains taxes yet).

This huge, and susprise distribution has really screwed up my plans for rebalancing some other stock, and will likely put us over the AGI limits on the college tax credits I was planning for this year. I am royally P****'d at Fidelity right now.

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