A part of the distribution may represent an ordinary income dividend or a capital gains distribution
In addition, the fund has declared a long term capital gains distribution
of USD0.0179 per share of common stock and a short term capital gains distribution
of USD0.0271 per share of common stock, payable on January 22, 2016 to stockholders of record at the close of business on December 28, 2015.
In effect, you'll be eliminating some or all the asset generating the troublesome capital gains distribution
, and replacing it with an asset generating no income tax liability, not subject to mandatory distributions at age 70 1/2, and not counting as a trigger for the 3.8 percent investment tax.
"The government lowered the tax on income from 30% to 22.5%, and it also suspended capital gains distribution
tax on profits for two years," Eissa said.
"You may be better off waiting until after the capital gains distribution
," says Ingrid John, a CPA and director of Capital Management Group in Washington, D.C.
In addition, the fund declared a long term capital gains distribution
of USD0.2124 per share of common stock and a short term capital gains distribution
of USD0.0210 per share of common stock, payable on January 16, 2015 to stockholders of record at the close of business on December 29, 2014.
It's also important to review a fund's prospectus to determine its capital gains distribution
history as well as its turnover rate--a measure of how often the manager sells stocks--which can trigger capital gains.
The article provided some practical advice for executing sound tax strategies (for example, to avoid purchasing a mutual fund just before it is due to make a capital gains distribution
BANKING AND CREDIT NEWS-December 4, 2014-The Swiss Helvetia Fund announces capital gains distribution
"Therefore," says Baptist, "if you're going to sell a fund at a loss, sell before it makes a capital gains distribution
. Similarly, try to avoid buying a fund right before a distribution, because you'll get that distribution and owe taxes." Most funds will tell callers when distributions can be expected.
"If you look at the capital gains distribution
of our tax-managed equity fund, it is zero, was zero and will be zero.
AllianceBernstein Income Fund Inc (NYSE:ACG) announced on Monday that it will pay a common stock one-time special income distribution of USD0.0910 per share; a long term capital gains distribution
of USD0.0179 per share; and a short term capital gains distribution
of USD0.0271 per share.