Author Topic: Potential Tax Risk of Mutual Fund Investing: "Embedded Gains"  (Read 21338 times)

brooklynguy

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Re: Potential Tax Risk of Mutual Fund Investing: "Embedded Gains"
« Reply #100 on: February 09, 2018, 08:55:12 AM »
A recent Wall Street Journal article has an update to last November's update to this old thread:

WSJ:  "An Index Fund's Sudden Death"

In a nutshell, the PNC S&P 500 Index Fund that was forced to make significant capital gain distributions to its shareholders due to high levels of shareholder redemptions (thereby forcing a major taxable event on the fund's remaining shareholders) is now being liquidated altogether, forcing an even bigger taxable event on the fund's remaining shareholders.

PathtoFIRE

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Re: Potential Tax Risk of Mutual Fund Investing: "Embedded Gains"
« Reply #101 on: February 09, 2018, 09:07:58 AM »
Thanks for the update, I always dread whenever this thread pops up in my unread list. VTSAX is our largest single stake, which I understand is somewhat protected from these types of events given it's special relationship with VTI, but just over 55% of our after-tax investment accounts are not in VTSAX and this risk has always made me a little nervous.