The Capital Gains Blog

Archive for the ‘Capital Gains Distributions’ Category

Question: My mutal fund had capital gains distribution in 2005. Do I include that in my 2005 tax return?

I am trying to validate my understanding of mutual funds and their tax implications.

Say I invested $100,000 in some mutual funds and the funds had a $8000 capital gains distribution in 2005. The gains were credited as additional shares in my account and my “cost” according to the mutual fund, is now $108,000. However, for the for 2005 taxes, it appears that I have to declare the $8000 gain as income and pay taxes on them. Is this correct?

Also, what happens, for example, if in 2007, the funds drop and I sell them all for $100,000? I have paid taxes on the $8000 gain, so now I have a $8000 Capital Loss. Is this correct?

Thanks.

Answer: You’re correct. Presumably you received a 1099-DIV with $8000 (or whatever) in the cap gains distribution. You would need to include that amount in your return. When you sell the shares, that amount will be included in your basis so your eventual gain will be total sales price-$108,000.

Pullback Buy Entry into S&P Energy SPDR (XLE)

Here are two ETFs we are monitoring for potential buy entry in the coming days. The first is the S&P Select Energy SPDR, XLE.

‘Ode To Obama.’

Question: How much am I taxed in Italy for distributions of mutual funds held in USA?

I am an American citizen and also an Italian citizen. After spending several years in the Usa I wish to return to Italy for good.
Once residing in Italy, how much will the Italian treasury tax dividens and capital gains paid to me by my mutual funds still held in the Usa?
Does the Italy-Usa double taxation treaty exempt an American citizen residing in Italy from Italian taxes on passive income ( such as mutual fund distributions) earned on a Usa source of investments, like the French-Usa treaty does? (As mentioned in Forbes magazine, November 2009).

Answer: Mutual fund distributions can be dividends or capital gains. You should determine which one, as the Treaty views them differently.

If Italy does tax world income, you will claim a Foreign Tax Credit on your US return.

Look at the treaty yourself here:

http://www.irs.gov/businesses/international/article/0,,id=169601,00.html

MFS Announces Closed-End Fund Distributions

BOSTON—-MFS Investment Management® announced today monthly distributions of the following closed-end funds, all with declaration dates of January 4, 2010, ex-dividend dates of January 12, 2010, record dates of January 14, 2010, and payable dates of January 29, 2010: Fund Income/Share Short TermGains/Share Long TermGains/Share Other Sources/Share* Total Amount/Share MFS® CaliforniaInsured …

JCCC Board of Trustees Meeting 3-26-09

Question: rolling over 401(k) to IRA…re; equity trading & capital gains in the IRA?

i know you can trade individual equities in an IRA held at a brokerage account, but do you have to pay Capital Gains Tax on your profits each year or are they deffered until distribution?

thanks

Answer: All amounts including contributions, capital gains, dividends and interest in a 401(k) and Traditional/Conversion (Rollover) IRA are deferred until withdrawn.

Canada Afternoon: C$ Ends Lower On Profit-Taking

TORONTO (Dow Jones)–The Canadian dollar ended slightly lower Monday, failing to match the gains of most rival currencies, as investors ignored some strong domestic data and took profits ahead of next week’s meeting of the Bank of Canada.

Mulvihill Premium Canadian Bank Quarterly Distributions Declared

TORONTO, ONTARIO– – Mulvihill Premium Canadian Bank has declared its quarterly distribution of $0.215625 on each of its Preferred Shares and $0.15 on each of its Class A shares, payable January 29, 2010 to shareholders of record as of January 15, 2010.

Walter E Williams – Capital & Wages

Question: If I took a Distribution in Cash from a Mutual Fund, do I have to subtract that amount from my Cost Basis.?

Either a Capital Gain or a Dividend distribution paid by my Mutual Fund . thanks for any help — John

Answer: No, if you got a capital gains or dividend distribution and took it out, your cost basis hasn’t changed. If you left it in, you’d ADD it to your cost basis. In either case, it’s taxable income to you that year.

Mulvihill Premium Canadian Bank Quarterly Distributions Declared

TORONTO, ONTARIO–(Marketwire – Jan. 5, 2010) – Mulvihill Premium Canadian Bank (the “Fund”) (TSX:PIC.A)(TSX:PIC.PR.A) has declared its quarterly distribution of $0.215625 on each of its Preferred Shares and $0.15 on each of its Class A shares, payable January 29, 2010 to shareholders of record as of January 15, 2010. To the extent that any portion of the distributions are ordinary taxable …

MeltDown #426 EMERGENCY ECONOMIC STABILIZATION