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Originally Posted by roob1
I invested 200K in a Vanguard mutual fund, and at year's end (2021 and 2022), it was valued at approx. 165K. Both years it was reported I had about 10K in capital gains. How can I have capital gains (and tax liability) when the investment value is less than I invested?
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Retiredguy123 is correct. Note, too, that you can offset the Capital Gains Distributions, if you have other losses on stock or funds you sold last year. It is always good to check your funds in mid-December each year to see if the funds will report Capital Gains Distributions (Your advisor should tell you that). If they do, you can offset them by selling stocks/funds with losses.