Is all of that $12T subject to capital gains tax? What about mutual funds held by pension plans or tax-deferred savings vehicles? (I am Canadian so I am not sure how 401ks, etc work but here in Canada a large portion of mutual fund assets are held in RRSPs or TFSAs which don't pay capital gains taxes).
This seems to avoid the reality that when the seller sells,
a: their lot isn't "theirs" -- the PM can decide what to sell.
b: the seller pays cap gains based on *their basis*
c: each sellers basis -- early or late -- is adjusted with every single cap gains payment, so its absolutely not the case that first one to sell "gets out" without taxes and those left in "get stuck." Those left in get a distribution and basis reset, which means they pay a little on the distro but nothing on that amount later.
So the ONLY actual tax dodge here is *timing*. Being in a MF making regular distros is mostly a nightmare from an accounting for basis perspective, but it's really just a quesiton of when, not if. (Obviously deferral is valuable).
Is all of that $12T subject to capital gains tax? What about mutual funds held by pension plans or tax-deferred savings vehicles? (I am Canadian so I am not sure how 401ks, etc work but here in Canada a large portion of mutual fund assets are held in RRSPs or TFSAs which don't pay capital gains taxes).
Phil,
This seems to avoid the reality that when the seller sells,
a: their lot isn't "theirs" -- the PM can decide what to sell.
b: the seller pays cap gains based on *their basis*
c: each sellers basis -- early or late -- is adjusted with every single cap gains payment, so its absolutely not the case that first one to sell "gets out" without taxes and those left in "get stuck." Those left in get a distribution and basis reset, which means they pay a little on the distro but nothing on that amount later.
So the ONLY actual tax dodge here is *timing*. Being in a MF making regular distros is mostly a nightmare from an accounting for basis perspective, but it's really just a quesiton of when, not if. (Obviously deferral is valuable).
but…who do you think will win… 👀 and when is it decided? 😶