I have about 30,000 to invest. 401 and roth ira's are maxed so I might just invest in a couple Vanguard mutual funds. As far as tax time, do I only report gains/losses whenever I sell the fund or do I have to report each year?? Any suggestions on some good funds to buy into???
2007-10-31 21:29:06 · 6 answers · asked by Alan D 1 in Business & Finance ➔ Taxes ➔ United States
You report gain/loss each year as distributed by the fund. When you sell, you report the gain or loss in value of your investment.
Each year when your mutual fund earns dividends or capital gains, you receive your share and it is reported to the IRS on a 1099DIV. You receive a copy of the 1099DIV.
You report the information from the 1099DIV on your tax return, normally on Schedule B. This income is taxable in the year distributed by the fund, whether you reinvest the income or receive it as cash. If you reinvest this income in the fund, it is added to your original investment and will not be taxed again (your "basis").
When you sell the mutual fund, if the selling price is more than your basis in the fund, you will pay capital gains tax on the increase in value.
The Vanguard website has complete descriptions of their funds. Get a prospectus before you invest. Also check out morningstar.com.
2007-11-01 00:26:45 · answer #1 · answered by ninasgramma 7 · 3⤊ 1⤋
Long term and short term capital gains are reported in the form of "Quarterly Estimates" for the fiscal taxing "quarter" in which they occur. The same applies to diviends whether reinvested or taken as a distribution, unless you are dealing with Tax Exempt funds such as the Franklin: Federal Tax Free or the American: Tax Exempt Bond Fund. The gains/losses from the sales of stock or mutuals are likewise reported during the quarter in which they occur.
To be safe, consult a tax advisor.
2007-11-04 11:32:10 · answer #2 · answered by Mike M 2 · 0⤊ 0⤋
The mutual fund will send you a statement showing the amounts you need to report. Basically it will be your share of the total mutual fund's gains and losses on what they sold, and dividends and interest on what they hold.
If you sold shares, you'll be reporting gains or losses on the share sale also. If you didn't sell anything, then you'll just report the amounts on the statement they send you.
2007-11-01 03:37:01 · answer #3 · answered by Judy 7 · 2⤊ 0⤋
You only have to report gains and losses when you sell the funds. However, there could be dividends issued and you may need ot pay tax on the dividends even if you have them reimbursed directly into the fund.
What you invest in is entirely up to you. However, with the recent rate cut leading to a weaker dollar, it wouldn't hurt to try an international fund. Do your own research.
Vanguard is good at keeping their fund expenses low.
2007-11-01 00:27:21 · answer #4 · answered by Steve 6 · 0⤊ 3⤋
you do not record finding out to purchase them. Any dividend, pastime or capital benefit earnings is often taxable (except the fund is held in a retirement account) contained in the 365 days in which it takes position. you'll acquire varieties 1098 and 1099 with this assistance (after the end of the 365 days) from the mutual fund or your broking service.
2016-10-23 05:05:56 · answer #5 · answered by ? 4 · 0⤊ 0⤋
I believe they are just like stocks, so you only need to report them when you sell.
2007-10-31 21:34:07 · answer #6 · answered by wacjr79 3 · 0⤊ 4⤋