Capital gain distributions represent capital gains received by the fund and are taxable, even if the fund invests in tax - exempt securities. (newyorklife.com)
There are exceptions, such as when you receive capital gain distributions from a mutual fund. (fairmark.com)
This is partly due to near - zero interest rates and yields on just about everything, and then the drastically reduced capital gains distributions in mutual funds (profits). (toolsformoney.com)