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Tax consequences

Unless you hold a tax-deferred account, such as an IRA, selling mutual fund shares will almost always affect your tax situation. Understanding the tax consequences of your transactions in taxable accounts can potentially lead to better investment decisions.

Short- and long-term capital gains

Selling mutual fund shares for a profit in a taxable account means you have experienced a taxable capital gain.

  1. If you've owned your fund shares for over a year before your sale, it's generally considered a long-term capital gain. Long-term gains receive more favorable tax treatment than short-term gains.
  2. Gains from your sale of fund shares held for one year or less are short-term and are taxed at ordinary income rates.

Capital losses

If you sell your mutual fund shares for a capital loss, you may be able to use that loss to offset:

  1. Capital gains you have incurred in other investments.
  2. Up to $3,000 in ordinary income each year.

Generally, any remaining personal capital losses you have from one tax year may be used in future years to offset capital gains or ordinary income.

Mutual fund exchanges

Many investors think of a mutual fund exchange as simply trading shares of one fund for another. When you exchange fund shares in a taxable account, you are actually selling the shares of one fund and using those proceeds to purchase the shares of the other fund. As a result, the exchange will have tax consequences if you have a capital gain or loss in the fund that you are selling.

IRS Publication 550, Investment Income and Expenses, which can be found at www.irs.gov contains additional information about the tax consequences of the sale of mutual fund shares.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus , or if available, a summary prospectus containing this and other information. Read it carefully before you invest or send money.

Any tax or legal information provided is a summary of our current understanding and interpretation of the current income tax regulations and is not exhaustive. Investors should consult their tax advisor or legal counsel for advice and information concerning their specific situation.

Janus Distributors LLC