All distributions from a mutual fund,whether paid out or reinvested,are taxable in the year in which they occur.

Question

Quizplus · Accepted Answer

This is because mutual funds are considered as pass-through entities for tax purposes, meaning any gains or income earned by the fund is passed on to the shareholders and is taxed as if the shareholders earned the income themselves. Therefore, any distributions from the mutual fund, whether it is in the form of a payout or reinvestment, is considered as taxable income in the year it occurs.

All Distributions from a Mutual Fund,whether Paid Out or Reinvested,are