Some funds are required to distribute capital gain
Every year. For those funds, you pay qualified dividend tax on dividend part. You also pay tax on the capital gain distrubution part. This is why 2008 was so terrible. Not only people have losses on their investment but also they had to pay tax on distributed capital gain part. lol...
Since you don't sell it, you don't pay tax on unrealized gain part.
If the ETF or fund doesn't distribut capital gain, then obviously there is nothing to pay tax on.
Dividends earned within traditional IRAs are not taxed when they are paid or reinvested. Rather, as part of an IRA's earnings, they're taxed at one's current income tax rate when they are withdrawn. Earnings on investments within a Roth IRA, including dividends, grow on a tax-free basis and are not subject to taxation when withdrawn. These deferments and exemptions are only valid if you wait until at least age 59½ to withdraw retirement funds.
These days a few companies weight so much on index
I see one reason that ETFs are no longer attractive. I can just buy top 10 holds of an ETF. It would be just fine. Then I don't need to pay any fees and I get all the dividends (no middle man).
If these top 10 stocks go down, all those ETFs will go down anyway.
it is the market weighted structure cause such lopsided skew
But I like your strategy - companies that grow to account for the top 10 largest market value names in an index, obviously are very good companies at their time. You are buying the lot without the need to do much homework.
有个问题：
用非退休资金来购买ETF基金（如VOO等），
每年有多少dividend要交税？
如果不卖，还有没有capital gain tax?
我知道很多active managed mutual fund ，就是不卖，除了dividend 要交税，另外还有capital gain tax.
dividend当然当年要缴税
要交短期或长期的capital gain tax.
非常不划算。
给懒人指明了一条可能的发财之道。
很多人还是在mutual fund里。
Every year. For those funds, you pay qualified dividend tax on dividend part. You also pay tax on the capital gain distrubution part. This is why 2008 was so terrible. Not only people have losses on their investment but also they had to pay tax on distributed capital gain part. lol...
Since you don't sell it, you don't pay tax on unrealized gain part.
If the ETF or fund doesn't distribut capital gain, then obviously there is nothing to pay tax on.
Dividends earned within traditional IRAs are not taxed when they are paid or reinvested. Rather, as part of an IRA's earnings, they're taxed at one's current income tax rate when they are withdrawn. Earnings on investments within a Roth IRA, including dividends, grow on a tax-free basis and are not subject to taxation when withdrawn. These deferments and exemptions are only valid if you wait until at least age 59½ to withdraw retirement funds.
很不幸。
一种是你卖的时候赚的。第二种是你手里的fund也有可能有capital gains pay out给你，虽然你没有主动买卖。
Some ETFs do distribut capital gain especially those levaged or covered call ETFs. You'd better buy those in a tax deferred account.
I see one reason that ETFs are no longer attractive. I can just buy top 10 holds of an ETF. It would be just fine. Then I don't need to pay any fees and I get all the dividends (no middle man).
If these top 10 stocks go down, all those ETFs will go down anyway.
Why ETFs?
决定选择不同。好在现在基金选择多，有足够产品满足不同需求。
schedule的。
But I like your strategy - companies that grow to account for the top 10 largest market value names in an index, obviously are very good companies at their time. You are buying the lot without the need to do much homework.