Cynthia Meason of GOBankingRates includes wealth advisor and CFA, Matt Nadeau, in her recent article about some of the ugly truths Americans should be aware of when it comes to taxes and how these truths may explain why their returns may not yield the results they anticipated. “If the mutual fund’s managers sell securities in the mutual fund for a profit, the IRS typically considers your share of that profit a capital gain, even if you have not sold the mutual fund. The mutual funds will usually distribute these capital gains to once a year and these capital gains are taxable income, even if you reinvested the money,” says Nadeau.
