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From: johnl@ima.UUCP
Newsgroups: net.invest
Subject: Re: How are mutual funds taxed?
Message-ID: <109000013@ima.UUCP>
Date: Fri, 8-Nov-85 15:56:00 EST
Article-I.D.: ima.109000013
Posted: Fri Nov  8 15:56:00 1985
Date-Received: Thu, 21-Nov-85 05:46:50 EST
References: <145@ucbjade.UUCP>
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Nf-ID: #R:ucbjade:-14500:ima:109000013:000:717
Nf-From: ima!johnl    Nov  8 15:56:00 1985


/* Written 12:24 pm  Nov  7, 1985 by cnrdean@ucbjade in ima:net.invest */
> Are dividends paid by mutual funds subject to the dividend
> exclusion when paying taxes?  What about capital gains?  

So long as the mutual fund behaves as an "investment company," which they
all do, the dividends and capital gains and losses pass through from the
original issuer to you.  The mutual funds generally pay no taxes themselves.
This means that dividends qualify for the exclusion if the dividends from
which the fund got the money did.  In practice this means that dividends
from regular stock funds qualify, while those from bond and money market
funds don't, since they're passing through interest.

John Levine, ima!johnl