By Chet Currier, Bloomberg News Investors who made changes in their U.S. mutual fund holdings last year may find a strange adventure awaiting them now. Then you bought yourself a ticket on an amusement- park ride we might call the Fund Tax Fun House. It's good for admission any time between now and April 16, this year's federal income tax filing deadline.
Wise heads suggest using it early, because the lines grow long toward closing time.
The ride may be gentlest for those who redeemed, or sold, their entire position in a fund at a single stroke. But let's say you sold only a part of your shares in a fund. That's the number you subtract from your sale proceeds to determine how much you gained or lost on the investment. All this is separate from capital gains distributions you may have received from your funds, which may bring you a tax bill whether you sold any fund shares or not. Also, bear in mind that you cannot use method A or C if you used B on a previous sale from the same fund.