Quote:
Originally Posted by Rainger99
You say “usually” results in a net capital gain distribution. There must be some years where a mutual fund has a net loss. But I don’t think I have ever been able to deduct those.
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I don't know because I only invest in index funds. I have never seen a net loss, but, it could be possible. I think the fund managers would try to avoid net losses because capital losses can only be used to offset ordinary income of up to $3K per year. So, a shareholder with a large capital loss could take multiple years to take advantage of a large loss. It may not be a good selling point for the fund.