I have some non-Vanguard mutual funds purchased in a taxable account some years ago. I’ve consolidated/exited several funds already but held off on these due to the taxable gains. But looks like the funds will be doing significant short term and long term capital gains distributions this year (most of my purchases are over a year), so having second thoughts:
Here are some more details (these are Trow price funds so fees are high at 0.4%-0.7% range)
- Fund A: 14.5K lifetime gains, 2.7k short term distribution, 3.7k long term CPA gains distribution
- Fund B: 61k lifetime gains, 1.5k short term, 5.2k long term
- Fund C: 62k lifetime gains, 5.3k short term, 6k long term
- [Fund D: 25k lifetime gains, 1K short term, 4.9k long term
- Fund E: 58k lifetime gains, 3.8k short term, 6.2k long term
Estimated tax rate-LT gains: 15%
Estimated tax rate- ST gains: 22%
Based on this, it looks like I’d need to pay $33k in taxes if I sell all before the cap gains distribution. If I hold, the tax hit would be 7.1K just for this year but probably similar again next year so over time, I’d likely be paying a lot more in taxes and fees.
Are there other things to consider before making a decision on this? And when is it too late to decide on exiting the funds to avoid the cap gains distributions?
Thanks in advance.