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The tax aspects of selling mutual fund shares

Posted by Admin Posted on Feb 11 2020

The tax rules involved in selling mutual fund shares can be complex. If you sell appreciated mutual fund shares that you’ve owned for more than one year, the profit will be a long-term capital gain. As such, the top federal income tax rate will be 20% and you may also owe the 3.8% net investment income tax. One difficulty is that certain mutual fund transactions are treated as sales even though they might not seem like it. For example, many funds provide checkwriting privileges. Each time you write a check on your fund account, you’re selling shares. Another problem may arise in determining your basis for shares sold. Contact us. We can explain in greater detail how the rules apply to you