Capital Gain Distributions

Capital Gains Distribution

An amount of money paid to shareholders of a mutual fund from its capital gains over the course of a year. That is, a mutual fund takes its capital gains over a year and divides them among shareholders, who are then responsible for capital gains taxes. Capital gains distributions are usually made at the end of each calendar year and they reduce the fund's net asset value. Because of the existence of capital gains distributions, some analysts advise against purchasing mutual funds at the end of a calendar year because a shareholder will become instantly liable for capital gains taxes.

Capital Gain Distributions

Amounts paid by mutual funds, regulated investment companies, and real estate investment trusts that represent the shareholder's portion of gain from the sale of capital assets owned by these investment companies. Capital gain distributions are taxed in the year constructively received and are always considered to be held long term.

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M2 EQUITYBITES-December 4, 2018-John Hancock Premium Dividend Fund And Tax-Advantaged Dividend Income Fund announces distributions and capital gain distributions

John Hancock Premium Dividend Fund And Tax-Advantaged Dividend Income Fund announces distributions and capital gain distributions

Global Banking News-December 4, 2018-John Hancock Premium Dividend Fund And Tax-Advantaged Dividend Income Fund announces distributions and capital gain distributions

John Hancock Premium Dividend Fund And Tax-Advantaged Dividend Income Fund announces distributions and capital gain distributions

In the last decade or so, more focus has been paid to these portfolios, which attempt to minimize annual capital gain distributions. The more tax-efficient your investments are, the potentially lower income taxes you will pay.

Think differently about tax reform

In both tax years, capital gain distributions from mutual funds were third highest in terms of percentage of total net gains less losses.

Sales of capital assets reported on individual tax returns, 2007

Manage increasing mutual fund capital gain distributions

Mid-year tax planning adjustments for your clients

First, the option permitting parents to include the income on their own returns has limitations that must be identified: The child's investment income can consist of only interest, dividends, and certain capital gain distributions, and it cannot exceed a certain limit that changes from time to time.

Kiddie tax complexity grows

Trusts with capital losses must consider this rule when planning capital gain distributions.

Removing capital gains from trusts

The investment policy and strategy reinvests all capital gain distributions and profits.

Global 10 Large Cap. is Awarded the "Best Fund Over Past Three Years" By Lipper-Reuters

Capital gain distributions by open-end mutual funds accelerate the capital gains tax liability of their taxable investors, thereby reducing their after-tax return.

Public Economics

A greater estimated percentage of taxpayers misreported gains or losses from securities sales (36 percent) than capital gain distributions from mutual funds (13 percent).

Capital Gains Tax Gap: Requiring Brokers to Report Securities Cost Basis Would Improve Compliance if Related Challenges Are Addressed

Long-term capital gain distributions were taxed at 20%.

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