The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Simple1_2_3 on April 18, 2018, 12:12:06 PM
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We have VGHCX in a taxable account and the annual capital gain distribution is killing us when tax time comes around.
We like this fund, but would prefer to hold a more tax efficient medical mutual fund as we have no plan to sell it in the near furture. Any suggestions for an alternative would be grately appreicated.
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VHT/VHCIX? (Those are funds, not advice.)
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Thank you. We will look into VHCIX.
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Go to Bogleheads and they will tell you to donate your shares and invest in something that does not perform as well.
Since I assume you like making money then just pay the tax, just do a better job of saving a portion of the payments you receive so you can pay your tax.
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If you're worried about taxes, selling might incur even more taxes. If your $10,000 investment went up to $14,000 and you sell, then then owe $4,000 in capital gains. Hopefully you held more than 366 days and can use the lower long-term capital gains rate (15% for most people). But that still leaves you paying maybe $600 of taxes on $4k of gains if you sell. At Vanguard, go to the "cost basis" area of your account and you can see how much unrealized gains will be realized when you sell.
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Thank you for your very constructive and helpful input. We know we are having a first world problem!