Taxing Issues Associated with Mutual Fund Investing
Many investors are familiar with and invest in mutual funds. These pooled investment funds are used by many investors because they have a number of positive features, including professional management and wide diversification. Over 44% of U.S. households invest in mutual funds, held in both qualified and non-qualified accounts. In fact, almost one-quarter of U.S. corporate equities are held in mutual funds.
One may wonder, are there any downsides to mutual fund investing? The short answer is “yes”. Let’s investigate some of the potential tax shortcomings associated with these types of investments. If after this short review you have additional concerns, contact a financial firm Somerville NJ.
Tax Problems Associated With Mutual Funds
By law, mutual funds must pass on to their shareholders any capital gains and dividends realized during the year. If you hold your mutual funds in a non-qualified account (i.e. not an IRA or 401-K) then …