Comments on: Important Mutual Fund Tax and Capital Gains Facts Every Investor Must Know

By: Best Blog Posts of The Week | Buy Like Buffett

Best Blog Posts of The Week | Buy Like Buffett — Sun, 01 Aug 2010 02:26:37 +0000

[...] Money Help For Christians discusses how investors will be affected by Mutual Fund and Capital Gains Tax Changes. [...]

By: Craig

Craig — Mon, 15 Feb 2010 15:24:19 +0000

@ Darren
Thanks for the clarification. You are right it is “one year or less.”

By: Lonely Valentine’s Day/Weekly Roundup

Lonely Valentine’s Day/Weekly Roundup — Sat, 13 Feb 2010 09:55:22 +0000

[...] like numbers, so I like Craig Ford’s post “Important Mutual Fund Tax and Captial Gains Facts Every Investor Must Know“. Craig not only explains the nuances, he walks you through the math. I think I will [...]

By: Darren

Darren — Thu, 11 Feb 2010 16:54:02 +0000

Very informative post! Regarding your 1st and 5th points, that’s exactly why I like investing in index funds. Since index funds are, by definition, created to track an index, there’s a lot less buying and selling of stocks. The only reason any buying or selling should happen is if a stock enters into or falls out of the actual index. These capital gains taxes within a fund can be a sneaky fee that many people aren’t aware of!

And just to clarify a bit, a short-term capital gain applies to a holding period of “one year or less,” rather than just “less than one year.” It’s a subtle difference, but it can cause confusion if you happen to sell exactly one year later. For instance, if you buy a stock on January 1, 2009, and sell it on January 1, 2010, the holding period is exactly one year. This would be considered a short-term gain, which would be taxed at the higher rate. Better to wait an additional day if you want the more favorable tax rate!
.-= Darren´s last blog ..The Laziest Way To Start Investing Successfully =-.