Planning & Education | Why Would I Trigger a Taxable Event?

> > >

The Basics |

Why Would I Trigger a Taxable Event?

For fund investors, taxable events can be triggered in specific ways:

By you, when you sell fund shares, which can trigger short- or long-term capital gains.

By the fund, when it distributes to shareholders either taxable income dividends or capital gains derived from the sale of securities in the fund's portfolio, or both.

Taxable Events You May Be Able to Control
A taxable event will occur when you sell fund shares for more than what you paid for them. It's important to note, however, that selling certain fund shares at a loss may help offset the effects of other taxable events. This strategy is called "tax loss selling."

Next: How Do Funds Trigger 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.