Investment and Finance

These are mutual funds which try to minimize the capital gain distributions to its shareholders. Capital gains are realized when securites in the fund are sold by the fund manager at a profit.

No. Capital gain distributions will have no effect on IRA accounts or other tax deferred accounts.

Dollar cost averaging is a systematic method of investing the same amount of money regularly over an extended period of time. For example, by investing $100 a month for five years in a mutual fund, an investor will be buying the fund at various price levels. The investor should not be concerned with the day to day fluctuations of the investment, but rather the general long term trend since he will be buying the fund on the dips as well as the upward fluctuations. All mutual funds provide for a method whereby investors can have a fixed monthly amount taken out of their bank or checking account automatically to implement dollar cost averaging. Speak to a CPA in your area to set this up.

Long-term capital gains are generally taxed at lower tax rates than those on wages and other ordinary income.
In general, if you are in the 15% tax bracket, the long-term capital gains tax rate is 0% (tax free).
If you are in tax brackets exceeding the 15% bracket, the long-term capital gains tax rate is 15%.

You may elect to report the sale on IRS Form 6252 which spreads the tax liability on the gain over the life of the installment period.
You may elect not to use the installment method if you want to report the entire profit in the current year of sale.

The long term holding period is more than one year. The short term holding period is one year or less. The significance of this determination is that gains on long term assets benefit from lower tax rates.

Generally, capital gain distributions from mutual funds are reported to you on Form 1099-DIV box 2a. You will then report this amount as long-term capital gains on IRS Schedule D line 13.

No. Losses are not allowed on sales between family members. Family members include sisters, brothers, parents, grandparents, children or grandchildren.

For Section 1244 losses, a taxpayer can claim an annual maximum of $50,000, if single, or $100,000 for a married couple. Any loss over this amount is a capital loss.