Not exact matches
The investors who have succeeded best are those who have planed their portfolios to live
off capital gains rather
than dividends and interest.
If you sell it for less
than your inherited basis, the result is a
capital loss, which you can use as a tax write -
off against other investment
gains or other income.
The investors enjoy
capital gain both in growth and dividend reinvestment option upon sale of units but in case of dividend reinvestment option the fund units have now increased more
than what they started
off with.
In particular, if you have a large
capital loss — long - term or short - term — you may be better
off if you have short - term
capital gain than if you have ordinary income.
The benefit to you, from a tax standpoint, is that you since your
capital gains are going to come in incrementally over several years, you'll be able to write them
off more efficiently
than if you had to figure out how to write them all
off in one year (per a traditional sale.)