<#-- Rebranding: Header Logo--> <#-- Rebranding: Footer Logo-->

How will selling my mutual funds affect my tax liability?

I have a mutual fund account that I had to claim $3,000 for in net capital gains this tax year (2017). I am now looking to sell some of my mutual fund shares to get immediate cash. How will this affect my tax liability for 2018? I want to pull out this $3,000 in net capital gains and I don't want to be double taxed on it. How do I avoid that?

Mutual Funds, Taxes
Sort By:
Most Helpful
March 2018

The $3,000 net capital gains you refer appear to be capital gains that accrued to the mutual fund from its holdings during 2017.  That's different from a $3,000 net capital gain that you would have from your sale of fund shares.  Be aware that the fund may well have further capital gains accruing this year, for which you would have tax liability payable in 2019.  That's not double taxation.  The taxes would be on completely separate gains.  One is the gains the fund makes from the sale of its holdings.  The other would be on gains you have from the sale of your fund shares.

Your tax liability for a sale of fund shares this year will depend upon several factors.  First, what is the gain above the cost basis?  Second, for how long have you held the shares.  If more than a year, you will be able to take advantage of capital gains rates, which are lower.  Third, what is your tax bracket?  If you are in the 10% or 15% bracket, no tax will be payable.  If your bracket is between 25-35%, the tax rate will be 15%.  If your bracket is higher, the capital gains tax rate would be 20%.


April 2018
March 2018