tax help. If you have mutual funds and you transfer or sell from one account to another, do you have to claim

Question

tax help. If you have mutual funds and you transfer or sell from one account to another, do you have to claim it and what is the cost basis?

Answer 1

becareful to move funds between account. Usually ENTRY is free, but EXIT is cost a lot. Check on the booklet, as this is charge as percentage.
For tax purpose, is only claim if you make loss, and pay tax if you gain. They will calculate anyway, by the end of taxation year, mutual funds will send the taxation form to you then you can see what is claimable. Usually people do not move from this to that all the time.
All the best

Answer 2

Yes, it's taxable, and must be reported. The form that the fund sends you will have the sale price on it, but might or might not have your cost basis on it. You basis if your original purchase price, plus any reinvested dividends or capital gains distributions that you've paid tax on during the time you've held the fund. And yes, that can be messy to calculate if you haven't kept track of it all.

Answer 3

Yes, it is considered a sale, and therefore has to be reported. Your cost basis is the amount you originally paid plus any reinvested dividends. Many of the mutual fund companies have that info on file and will give it to you if you call, Or they may tell you your gain or loss at the end of the year.

Answer 4

Of course, it is a taxable transaction. The basis depends on which of the three accounting methods you have chosen for that fund. "Average" cost basis is the default, but I prefer the "specific share" method which allows you to sell the most costly shares first, thus minimizing the immediate taxes.

Answer 5

Yes that is a reportable event and the gain is taxable.

Unless the funds are inside an annuity, an IRA, a 401(k) plan, etc.

But if you invest $1,000 in the Fidelity ABC fund and it grows to $1,200 and you transfer it to the Fidelity XYZ fund the $200 gain is taxable.

Answer 6

it depends if the fund is a no-load fund. no load will mean that it's open ended and you won't have to pay to transfer it.

i recently transferred 15% gain in one fund to another safer fund free of tax. it's when you cash it out that you get taxed. if you find that you do have to pay a fee on closing or transferring a fund don't do it. any % shaved off your gain is no fair and the only way to avoid it is to not do it...unless you really have to.

funds should generally be left alone to mature, any loss of % is quite a distraction to it's gains.