Capital Gains Distribution
Distributions that are paid to a mutual fund's shareholders out of the capital gains of the company's investment portfolio. Investopedia Says:
Mutual fund capital gains distributions typically occur near the end of the calendar year and are taxable to the fund's shareholders.
This poses a problem for some mutual fund investors who make initial purchases of 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 that is reduced from the distribution. Related Terms:
Calendar Year
Capital Gain
Capital Gains Exposure - CGE
Capital Gains Tax
Capital Loss
Distribution
Mutual Fund
Net Asset Value - NAV
Shareholder
Tax Gain/Loss Harvesting |