Liquidating mutual fund

Due to their construction, ETFs only incur capital gains taxes when you sell the fund.In a mutual fund, capital gain taxes are incurred as the shares within the fund are traded during the life of the investment.Many investors use mutual funds throughout their lives to invest.When it comes time to sell mutual funds, dealing with taxes can be complicated, especially if you've reinvested dividends and capital gains distributions into additional shares.Commodity ETFs, style ETFs, country ETFs, even inverse ETFs.There are so many types of ETFs for investors, tracking the performance of a certain index or achieving a specific financial goal may be more attainable than with a mutual fund.Liquidating a portfolio’s mutual funds may increase risk, increase commissions and fees, and incur early capital gains taxes.

As well as being simplistic investments, ETFs are also more cost-effective than mutual funds.

You are always a trade away from opening or closing a position.

With mutual funds, shares in the asset are constantly being traded to hit a target price and seek desired performance.

(A good broker can help -- visit our broker center to compare options.) For those inheriting mutual funds, the tax aspects are actually much simpler.

Let's take a look at some of the tax implications of inherited mutual funds.

Leave a Reply