The way you get capital losses on a mutual fund is to sell the shares. If you do this, the losses are long or short term depending on the dates you purchased and sold the shares--like a stock. When a fund you have owned for 10 years makes a distribution, part of that distribution is likely to be ordinary income and part short term gains: and the distribution is what they say it is. Similarly as mentioned, if you buy a fund and the next day it distributes, you may have manufactured a long term gain, but you manufactured the gain (taxable) without having anything to show for it, because the net asset value drops by the amount of the distribution. I wanted to point out that to do this is not a good idea. Fine to sell a mutual fund you have had a long time BEFORE it makes a distribution, as your gain will be all long term. Best wishes, Chris
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