Avoid Unnecessary Mutual Fund Capital Gains Taxes

Many mutual funds will make their capital gains distributions before the end of the year. If you are considering selling a fund, do so before the distribution is made so you will not be required to pay the tax on the gains. If you want to buy a fund, wait until after the fund distributes its capital gains. Otherwise, you must pay the tax on gains even if you just bought the fund.

Check a fund's Web site for distribution dates before you buy or sell any fund at this time of year.

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Posted November 27, 2006.