Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I'm new to mutual funds--currently the only ones I own are part of my 401ks. Several of us small investors around the office have been discussing the distributed capital gains that holders of non-tax-protected mutual fund shares pay each year.

Sooner or later, you'll end up selling your shares of the fund--hopefully for a lot more than you paid all those years ago. Do you have to pay long-term capital gains on the difference between the original purchase price of the shares and the eventual sale price? Or does the cost basis of the shares get adjusted every year as part of the capital-gains distribution routine?

And if it's the former and not the latter, isn't that double taxation?

My apologies if this has already been answered on the board. I searched, but couldn't find it...
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.