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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: JHR who wrote (4837)	12/11/1997 4:25:00 PM
From: Big Dog	Read Replies (1) \| Respond to of 95453

JHR, You have it right on mutual fund distributions. Fund ABC, price of 15.00, has 1.00 in realized gains it HAS to distribute. If you buy the fund on the day before the ex-date of distribution you will have to pay tax on the amount you arepaid -- even though in reality it is a return of capital. The price of the fund will be adjusted down by the amount of the distribution (1.00 in this case). Result is you now have 1.00 in "cash" and 14.00 price on the fund. If you sell before the distribution ex-date and have a gain, you will pay capital gains tax on the amount of the gain and you will not be paid the distribution. If you have a loss on the fund and sell on or after the ex-date, you will be paid the amount of the distribution (taxable), plus your loss will be increased by the amount of the distribution adjustment. Bottom line -- don't buy mutual funds near the distribution date unless you are in a tax-protected account like and IRA. (Some mutual funds pay out more gains than others due to the nature of the fund. I predict the FSESX fund will have a hefty distribution due to active trading and a lot of realized gains.) If you have a specific question email me and I will try to help. (Did you guys know I am NASD Series 7 registered? Cool, huh? -- and ya'll just thought I was an oil dude.)