Getting a large payment from your favorite stock-market mutual fund late in the year may feel like an early Christmas gift. It’s time for a reminder about a tax trap that often catches investors by surprise when they invest in equity funds for a taxable account late in the year. “Taxes are an important piece to the puzzle with mutual funds,” says Russel Kinnel, director of manager research for Morningstar. During 2018, mutual funds distributed $511 billion in capital gains to shareholders, the ICI says. These numbers apply to returns for the 2020 tax year, to be filed typically the following year.

Source: Wall Street Journal October 21, 2019 02:03 UTC