In Focus: Mutual fund tax burden

Watch out...if you own mutual funds in a taxable account make sure you check your fund's year-end distribution schedule. Even if the fund value is down for the year, they may still be planning a taxable year-end distribution. Some distributions will be small, but some could be as much as $2 per share. Do a little research now to decide whether to hold on and pay the tax (the distribution adds to your tax cost basis anyway so you won't double pay tax when you sell) or decide to sell now and move to another more tax efficient investment like an ETF.