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Mutual Funds Question – Capital Gains Tax

 

Q: I am in the 15% tax level and do not pay taxes on long term dividends and capital gains. I have mutual fund with a high capital gain basis. Can I sell and buy back the next day to avoid possible taxes in 2013? Good idea?

A: Thanks for the email. You should consult with a qualified tax advisor regarding tax specific questions and how the issues pertain to your portfolio.

However, you should note that capital gains are indeed 15% this year and uncertain what they will be in the future. Also, be advised that you must wait 31 days before buying back a position that you sell in order to receive the long-term capital gains treatment on your assets. Again, you should confirm this with your tax advisor, but this is our opinion and understandings.


 

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