Capital Gains Treatment

Capital Gains Treatment
Describes lump-sum distributions of qualified plan balances that accrued before 1974 may be eligible for capital gains treatment.
Capital gains distributions typically occur near the end of the calendar year and are taxable to the shareholder of the investment company. This poses a problem for some mutual fund investors who purchase new mutual funds near the end of a calendar year. Because they receive a capital gains distribution, they immediately receive taxable income and face a mutual fund NAV is reduced from the distribution.
A Long-Term Mindset Meets Dreaded Capital-Gains Tax - Investors would be wise to consider the impact of capital-gains tax on their returns.