Sentences with phrase «earnings are subject to capital gains tax»

When the underlying assets in a mutual fund are sold, earnings are subject to capital gains tax.

Not exact matches

If the Fund were to fail to comply with the income, diversification or distribution requirements, all of its taxable income regardless of whether timely distributed to shareholders would be subject to corporate - level tax and all of its distributions from earnings and profits (including from net long - term capital gains) would be taxable to shareholders as ordinary income.

The earnings from an annuity, when withdrawn, are subject to the ordinary income tax rate, which for many is higher than the long - term capital gains rate that one incurs in owning a mutual fund, according to Daniel Kurt, writing in Investopedia.

The key note here is that earnings withdrawn for non-qualified reasons (aka not for college expenses) are subject to income tax, not capital gains tax which they alternatively would be subject to in the taxable account (which would effectively be 0 % if I'm within the 15 % income tax bracket).

However, unlike Coverdell and 529 plans, investment growth is not tax free, and earnings from the account are subject to federal income and capital gains taxes.

The earnings stemming from your personal investment would be subject to capital gains and the earnings stemming from the IRA can continue to grow on a tax - deferred basis.