|
The Basics |
|
Which Funds Can Generate Taxable Distributions?
|
To assess your potential tax liability, know your fund's investment
objective and investment strategy. The chart below provides an overview on various funds' potentials for
providing taxable income, as well as capital gain distributions.
Taxes
and Mutual Funds — A Fund's
Potential For Making Taxable Distributions |
Type
of Fund |
Potential
for Taxable Income |
Potential
for Captial Gain Distribution |
Taxable
money market |
High |
None |
Tax-exempt
money market |
Very
Low |
None |
Taxable
bond |
Very
High |
Medium |
Tax-exempt
bond |
Low |
Medium |
Balanced
(stocks and bonds) |
Medium
to High |
High |
Growth
and income stock |
Medium
to High |
High |
Growth
stock |
Low |
High |
Value
stock |
Low
to Medium |
High |
Next:
Different Funds Trigger Different Kinds of Taxable Events
This information is general in nature and is not intended to constitute tax advice. Always consult your tax advisor for more detailed information on tax issues and advice on your specific situation.
Investors should consider the investment objectives, risks, charges, and expenses of a fund carefully before investing. Download a prospectus that contains this and other information about a fund, and read it carefully before investing.
|
