0
A Mutual fund is a collection of stocks and/or bonds managed by an individual or team of individuals. Investors are able to purchase shares of these funds in much the same way they can purchase individual stocks or bonds. One of the biggest differences of course is how they are taxed. For example, when you purchase an individual stock, you will not owe tax on a gain due to appreciation until you sell it. A mutual fund on the other hand will declare capital gains once a year because the manager has sold some equities during that year. You will pay tax on that capital gain even if you purchase more of the same fund with the capital gain proceeds. So, it is very important to keep track of the cost basis of your mutual fund shares so you don't overpay in taxes when you decide to sell it. This is why investors purchase stocks in their taxable accounts and mutual funds in their retirement accounts. Jay
What else can I help you with?
Summary for mutual fund awareness?
Mutual Fund An investment vehicle which is comprised of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market securities and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. Reliance Mutual Fund can be taken as an exemplary outstanding Mutual funds available at present.
What are capital gains?
Capital Gains are calculated as the difference between the price you paid for a security and price you received for the security at the time of sale. Depending on the length of time the security is held, different tax calculations are used. If a security is held less than year, the gain is considered short-term and taxed based on the investor's personal income tax rate. If the security is held longer than a year, the gain is taxed at a fixed rate of twenty percent. If you hold mutual funds, this is distributed once a year and the taxes are the obligation of the investor. This is only applicable in a taxable mutual fund held outside of tax-deferred accounts. Even if the capital gains are reinvested in a taxable mutual fund, the investor is obligated to pay the taxes on the gain.
Are index funds better than mutual funds?
Index funds have the potential to be more profitable than mutual funds. Unlike mutual funds, the contents of an index fund are more easily known. The individual stocks that make up an index fund are easier to keep track of. It is easier to track the fund gains and losses. Hence the index.
Can you explain how mutual fund distributions work?
Mutual fund distributions are payments made to investors from the fund's earnings, such as dividends and capital gains. These distributions are typically paid out regularly, either in cash or through reinvestment in additional fund shares. Investors can choose to receive these distributions as income or reinvest them to potentially grow their investment further.
Stakeholder of mutual fund?
A stakeholder of a mutual fund is someone who has interest in it.
On what basis are mutual funds taxed?
shareholders are taxed on the distribution of fund's income. For tax purpose, mutual funds distribute their net income to the shareholders in two ways: (1) dividend and interest payments and (2) realized capital gains.
Are you taxed when you withdraw money from a mutual fund?
Yes you are taxed when withdrawing money from a mutual fund. Your current tax rate would apply.
When selling mutual funds are you taxed only on the dividends and earnings if the realized gains and losses were recorded in prior years and the tax basis adjusted?
diviend on sahre and mutual fund is fullt TAX FREE.And loss on sale of mutual fund can set-off from last year gains and carry-forward for the next 7 years.....
You own a mutual fund and receive no distributions cash but the mutual fund has sold assets and has recorded gains These gains are passed through to you as the owner and are taxed Is it a Phantom inco?
Mutual funds buy and sell stock on your behalf, as if it is done by you. Therefore, if gains were realized, you will be taxed on the gain. The money will get reinvested into something else and stay in the fund, and you will receive no distribution. It is just like keeping the interest on a savings account to accumulate instead of cashing it - in either case you will end up paying tax. The average fraction of funds holdings that is sold per year is called turnover ratio. For example, a turnover ratio of 50% means that the fund on average sells half of its holdings one a year. As explained here: if you bought into fund before it sold its holdings, you might get taxed on gains you did not participate in. They further explain that buying funds with smaller turnover ratios or ETFs reduces the exposure to this tax.
Is dividend ordinary income?
Most dividends are. However, long term capital gains distributions from a mutual fund are capital gains. Liquidating dividends and return-of-capital dividends can be capital gains. And, to make matters more confusing, some dividends, knows as "qualifying dividends," are taxed at long term capital gains rates even though they are not capital gains.
How many AMC in India?
As of may 2009 there are 38 asset management companies operating in india: 1 AIG Global Investment Group Mutual Fund 2 Baroda Pioneer Mutual Fund 3 Benchmark Mutual Fund 4 Bharti AXA Mutual Fund 5 Birla Sun Life Mutual Fund 6 Canara Robeco Mutual Fund 7 DBS Chola Mutual Fund 8 Deutsche Mutual Fund 9 DSP BlackRock Mutual Fund 10 Edelweiss Mutual Fund 11 Escorts Mutual Fund 12 Fidelity Mutual Fund 13 Fortis Mutual Fund 14 Franklin Templeton Mutual Fund 15 Goldman Sachs Mutual Fund 16 HDFC Mutual Fund 17 HSBC Mutual Fund 18 ICICI Prudential Mutual Fund 19 IDFC Mutual Fund 20 ING Mutual Fund 21 JM Financial Mutual Fund 22 JPMorgan Mutual Fund 23 Kotak Mahindra Mutual Fund 24 LIC Mutual Fund 25 Mirae Asset Mutual Fund 26 Morgan Stanley Mutual Fund 27 PRINCIPAL Mutual Fund 28 Quantum Mutual Fund 29 Reliance Mutual Fund 30 Religare AEGON Mutual Fund 31 Religare Mutual Fund 32 Sahara Mutual Fund 33 SBI Mutual Fund 34 Shinsei Mutual Fund 35 Sundaram BNP Paribas Mutual Fund 36 Tata Mutual Fund 37 Taurus Mutual Fund 38 UTI Mutual Fund
Summary for mutual fund awareness?
Mutual Fund An investment vehicle which is comprised of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market securities and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. Reliance Mutual Fund can be taken as an exemplary outstanding Mutual funds available at present.
What are capital gains?
Capital Gains are calculated as the difference between the price you paid for a security and price you received for the security at the time of sale. Depending on the length of time the security is held, different tax calculations are used. If a security is held less than year, the gain is considered short-term and taxed based on the investor's personal income tax rate. If the security is held longer than a year, the gain is taxed at a fixed rate of twenty percent. If you hold mutual funds, this is distributed once a year and the taxes are the obligation of the investor. This is only applicable in a taxable mutual fund held outside of tax-deferred accounts. Even if the capital gains are reinvested in a taxable mutual fund, the investor is obligated to pay the taxes on the gain.
What is pimco funds?
Pimco funds are mutual funds. They are a type of mutual fund that gains interest over time. Pimco is a international financial institution from whom you would get these mutual funds.
Is a mutual fund a corporation?
A mutual fund is a corporation
Are index funds better than mutual funds?
Index funds have the potential to be more profitable than mutual funds. Unlike mutual funds, the contents of an index fund are more easily known. The individual stocks that make up an index fund are easier to keep track of. It is easier to track the fund gains and losses. Hence the index.
Can you explain how mutual fund distributions work?
Mutual fund distributions are payments made to investors from the fund's earnings, such as dividends and capital gains. These distributions are typically paid out regularly, either in cash or through reinvestment in additional fund shares. Investors can choose to receive these distributions as income or reinvest them to potentially grow their investment further.
