Watch Your December Statements.
Provided by Taylor McClish
This time of year, you might glance at an account statement and see there has been an adjustment. But there may not be any cause for concern.
Many mutual funds in December pay shareholders capital gains distributions that they have accumulated throughout the year.1
Typically, mutual fund companies start making estimates about distributions as early as November and most finalize the payment by mid-December.1
It’s important to remember that if your mutual fund is in a tax-deferred account—and you are reinvesting distributions—the potential distributions may be a non-event at this time. But you may owe taxes when you begin to sell your holdings.
On the other hand, if your mutual fund is in a taxable account, you may owe 2020 taxes on the distributions whether you reinvested the distribution or accepted payment.
Most of the larger mutual funds companies have posted information on their websites regarding year-end distributions. But the estimates can be confusing, so please contact your trusted financial professional, who may be able to provide some guidance.
Remember, this
is for informational purposes only and is not a replacement for real-life
advice. Mutual fund distributions may only be one part of your overall tax
situation, so make sure to consult your tax, legal, or accounting professional
before modifying your strategy.
Taylor McClish may be reached at (503) 239-3060 or Taylor.McClish@cunamutual.com
Oregonians Financial Planning Website
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.
Citations
1. Morningstar.com, November 9, 2020
Comments