Pain with Little Gain

Physician's Money DigestOctober15 2003
Volume 10
Issue 19


If you buy into a mutual fund nearthe end of the year, you may be settingyourself up for a tax hit that you don'texpect. Funds that have net realizedcapital gains generally make distributionsnear the end of the year, and thosedistributions are taxable unless youhold the fund in a tax-deferred account.If you buy in late, chances are youaren't getting the benefit of the run-upthat generated the capital gains. A smallconsolation is that, under the new taxlaw, you'll pay just 15% in long-termcapital gains tax instead of 20%.: Some mutual fund companies, likeT. Rowe Price ( Vanguard (,post information on their Web sites listingthose funds that are expected tomake taxable distributions by year-end.

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