Re: Novice tax question

<seafh@xxxxxxx> wrote:

> While we are talking about mutual fund gain tax, I am wondering why
> most mutual funds want to distribute most gains regularly and resulted
> in tax for the owners? If it is the law, I have known some funds that
> don't do that regularly.

The law specifies exactly what type of income must be distributed to the
shareholders. Distribution will be by check or through additional funds in
the share, per the instructions of the shareholder. Regardless of which
distribution method, the distribution is taxable income to the shareholder.

Some funds are designed to be "tax efficient," meaning that they strive to
generate little income that must be distributed.
--
Phil Marti
Clarksburg, MD


.

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