Large Position in Fidelity Blue Chip (FBGRX)

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
clammyhands
Posts: 28
Joined: Sat Oct 19, 2019 9:36 am

Large Position in Fidelity Blue Chip (FBGRX)

Post by clammyhands » Sat Oct 19, 2019 9:49 am

Hello Bogleheads,

I'm a long-time lurker on these forums and appreciate the great advice provided by the community all these years. I have a question which has been bothering me for some time.

My wife has a relatively large position in the Fidelity Blue Chip Growth fund (FBGRX) in a taxable account. The fund is worth $86k at the moment, $39k of which is growth/gains. Her family put money in the fund back in 2002 as a way to give her money for college expenses. She didn't end up using all of the money to pay for college. Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill. On the other hand, the annual taxable gains distributions from this fund have been pretty sizable on an annual basis whereas having this money in an indexed ETF would not have that problem.

Is it better to keep the fund and possible swap it with an index fund/ETF during a major downturn? Should we swap it out for an index fund now and pay the taxes? Or should we just keep it?

Thank you!

Valuethinker
Posts: 39959
Joined: Fri May 11, 2007 11:07 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Valuethinker » Sat Oct 19, 2019 10:27 am

clammyhands wrote:
Sat Oct 19, 2019 9:49 am
Hello Bogleheads,

I'm a long-time lurker on these forums and appreciate the great advice provided by the community all these years. I have a question which has been bothering me for some time.

My wife has a relatively large position in the Fidelity Blue Chip Growth fund (FBGRX) in a taxable account. The fund is worth $86k at the moment, $39k of which is growth/gains. Her family put money in the fund back in 2002 as a way to give her money for college expenses. She didn't end up using all of the money to pay for college. Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill. On the other hand, the annual taxable gains distributions from this fund have been pretty sizable on an annual basis whereas having this money in an indexed ETF would not have that problem.

Is it better to keep the fund and possible swap it with an index fund/ETF during a major downturn? Should we swap it out for an index fund now and pay the taxes? Or should we just keep it?

Thank you!
Fantastic timing! 2002 was pretty near the bottom of the penultimate bear market (so far).

Depending on expense ratio I would plan to sell it over say 4 tax years (including this one).

Yes you would pay tax but you might in that time hit a bear market and pay less tax.

If ER is low enough I might take 5 to 6 years to do it.

Topic Author
clammyhands
Posts: 28
Joined: Sat Oct 19, 2019 9:36 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by clammyhands » Sat Oct 19, 2019 11:24 am

Valuethinker wrote:
Sat Oct 19, 2019 10:27 am

Fantastic timing! 2002 was pretty near the bottom of the penultimate bear market (so far).

Depending on expense ratio I would plan to sell it over say 4 tax years (including this one).

Yes you would pay tax but you might in that time hit a bear market and pay less tax.

If ER is low enough I might take 5 to 6 years to do it.

Thank you for the advice! Yes it has been a spectacular investment I'd say, but I'm not at ease with its concentration in Amazon, Microsoft, Google, and Apple. That seems like a good compromise - selling it off in installments rather than all at once.

Valuethinker
Posts: 39959
Joined: Fri May 11, 2007 11:07 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Valuethinker » Sun Oct 20, 2019 3:10 am

clammyhands wrote:
Sat Oct 19, 2019 11:24 am
Valuethinker wrote:
Sat Oct 19, 2019 10:27 am

Fantastic timing! 2002 was pretty near the bottom of the penultimate bear market (so far).

Depending on expense ratio I would plan to sell it over say 4 tax years (including this one).

Yes you would pay tax but you might in that time hit a bear market and pay less tax.

If ER is low enough I might take 5 to 6 years to do it.

Thank you for the advice! Yes it has been a spectacular investment I'd say, but I'm not at ease with its concentration in Amazon, Microsoft, Google, and Apple. That seems like a good compromise - selling it off in installments rather than all at once.
I haven't looked at the portfolio.

If you compare with Vanguard Total Stock market are the weightings much greater? Because those are also the largest holdings in the Vanguard fund.

If they are then that's a logic for speeding up the sale.

You have a tax year and you can sell 25 per cent this tax year? Then if you sold 25 per cent in January then you can afford to stretch the rest out.

Silverado
Posts: 284
Joined: Fri Oct 18, 2013 6:07 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Silverado » Sun Oct 20, 2019 6:14 am

You didn’t say if you reinvest distributions or not, but don’t do that and invest those dollars into a lower cost fund instead.

We TLH out of a Janus fund into T.Rowe Price Science and Technology in 2009 and added some for four years until we got smarter, and turned off auto reinvest. The fund keeps going up and generally distributes large gains, but it is a good problem to have. I feel less bad about the added tax burden now that the taxed distribution dollars go into Vanguard Total Stock. When there is a downturn large enough, we’ll dump the rest of it. It is fun to look at the graph and see the 'net amount invested' be around -$25k but have a balance of $60k.

jeleffto
Posts: 6
Joined: Wed Oct 17, 2012 10:36 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by jeleffto » Sun Oct 20, 2019 8:02 am

FGBRX looks to be doing pretty well, but won't always be the case.
Last edited by jeleffto on Thu Oct 31, 2019 6:14 am, edited 2 times in total.

User avatar
LiveSimple
Posts: 1588
Joined: Thu Jan 03, 2013 7:55 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by LiveSimple » Sun Oct 20, 2019 8:16 am

I will not plan to sell, just to reinvest. Wait until a time comes, when you can use the money, such as buying a home or college education, etc. In the end if you do nothing the inheritance will have less capital gains after you and your spouse. It is a good fund, not that bad.

Valuethinker
Posts: 39959
Joined: Fri May 11, 2007 11:07 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Valuethinker » Sun Oct 20, 2019 10:05 am

jeleffto wrote:
Sun Oct 20, 2019 8:02 am
Silverado wrote:
Sun Oct 20, 2019 6:14 am
You didn’t say if you reinvest distributions or not, but don’t do that and invest those dollars into a lower cost fund instead.

We TLH out of a Janus fund into T.Rowe Price Science and Technology in 2009 and added some for four years until we got smarter, and turned off auto reinvest. The fund keeps going up and generally distributes large gains, but it is a good problem to have. I feel less bad about the added tax burden now that the taxed distribution dollars go into Vanguard Total Stock. When there is a downturn large enough, we’ll dump the rest of it. It is fun to look at the graph and see the 'net amount invested' be around -$25k but have a balance of $60k.
FBGRX seems to be quite a bit more concentrated in the top 10 holdings compared to the Total Stock Market Index (41% vs. 18%) and the turnover is much higher at 45% compared with 3%. It has been a great investment so far, but with those stats it doesn't seem like a great long-term investment.

Yes, the distributions and dividends are being reinvested. That's a good point. Thank you for the advice. I was also thinking of waiting for a downturn, but given the makeup of this fund (large growth) I feel like it might be hammered more than something like VTSAX. I'm still wondering if it's better to eat the tax rather than let it plunge.
Then take half off the table now and let the rest ride? One can split that over 2 tax years?

Certainly do not reinvest any distributions.

Grt2bOutdoors
Posts: 22416
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Grt2bOutdoors » Sun Oct 20, 2019 10:15 am

clammyhands wrote:
Sat Oct 19, 2019 11:24 am
Valuethinker wrote:
Sat Oct 19, 2019 10:27 am

Fantastic timing! 2002 was pretty near the bottom of the penultimate bear market (so far).

Depending on expense ratio I would plan to sell it over say 4 tax years (including this one).

Yes you would pay tax but you might in that time hit a bear market and pay less tax.

If ER is low enough I might take 5 to 6 years to do it.

Thank you for the advice! Yes it has been a spectacular investment I'd say, but I'm not at ease with its concentration in Amazon, Microsoft, Google, and Apple. That seems like a good compromise - selling it off in installments rather than all at once.
If it isn’t broke, don’t fix it. The ER is high? How high? Use the portfolio visualizer tool and compare it to a low Er fund that is comparable. Decide then if the extra expense may be worth it. As for the concentration, those are very profitable companies, so long as percentages are not individually exceeding 5% of the fund, I wouldn’t worry too much. This is long term money.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

JW-Retired
Posts: 7178
Joined: Sun Dec 16, 2007 12:25 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by JW-Retired » Sun Oct 20, 2019 10:53 am

clammyhands wrote:
Sat Oct 19, 2019 9:49 am
Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill.
FBGRX gains were just average not "really good" luck. Looks like it has lagged the SP500 only modestly since 2002. That's not bad for a fund with a 0.80% ER. That ER is highish for us Bogleheads but it takes many years to do a lot of damage.

IMO, there is no hurry to dump this fund. Certainly turn off reinvestment of the earnings of the fund, but if it's going to cost you significant money to sell it, I would keep that money and invest that amount in low cost funds in your taxable account instead.
JW
Retired at Last

Elysium
Posts: 2761
Joined: Mon Apr 02, 2007 6:22 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Elysium » Sun Oct 20, 2019 11:38 am

Fidelity Blue Chip (FBGRX) is a large cap growth fund. LCG has performed very well of late. I have not checked how concentrated it is.

PV shows factor regression of negative loads on Value and Size, that makes it squarely LCG. Comparable to Vanguard Growth Index (VIGRX) instead of 500 Index. Comparable Vanguard active fund would be either U.S Growth or Primecap.

FBGRX shows slight outperformance compared to Growth Index, PV shows annualized alpha of 1.38%, which is not insignificant but not large. Primecap by comparison shows alpha of 2.3% which is quite large enough to show manager skills in the past.

Overall, FBGRX does not look like a bad fund that you need to rush to sell, especially given significant capital gains. Although since LTCG rates are at historical lows at this time, and there is discussions on raising it much higher by the people running for office, I would think it may not be a bad time to start realizing LTCG if that helps keep the gains of the past, while transitioning into low cost passive options.

livesoft
Posts: 71320
Joined: Thu Mar 01, 2007 8:00 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by livesoft » Sun Oct 20, 2019 1:27 pm

Standard advice for getting out of a taxable investment that has large unrealized capital gains:

1. Stop any automatic reinvesting if that is used.

2. Give away shares to charity.

3. Give away shares to children or others that would pay lower taxes and have them sell it.

4. Sell shares later when in a lower tax bracket.

5. Sell shares over many years.

6. If one has carryover losses from other investments, then sell shares.

7. Combinations of all of the above.
Wiki This signature message sponsored by sscritic: Learn to fish.

Valuethinker
Posts: 39959
Joined: Fri May 11, 2007 11:07 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Valuethinker » Mon Oct 21, 2019 3:20 am

clammyhands wrote:
Sat Oct 19, 2019 9:49 am
Hello Bogleheads,

I'm a long-time lurker on these forums and appreciate the great advice provided by the community all these years. I have a question which has been bothering me for some time.

My wife has a relatively large position in the Fidelity Blue Chip Growth fund (FBGRX) in a taxable account. The fund is worth $86k at the moment, $39k of which is growth/gains. Her family put money in the fund back in 2002 as a way to give her money for college expenses. She didn't end up using all of the money to pay for college. Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill. On the other hand, the annual taxable gains distributions from this fund have been pretty sizable on an annual basis whereas having this money in an indexed ETF would not have that problem.

Is it better to keep the fund and possible swap it with an index fund/ETF during a major downturn? Should we swap it out for an index fund now and pay the taxes? Or should we just keep it?

Thank you!
There's good advice on this thread from e.g. Livesoft about how to liquidate this position over time.

"Minimize regret" is an important strategy in decision making. That often translates in financial decisions (where the best route is only clear in retrospect) as "split the difference". Break the problem into 2 parts (or 3) and then work from there.

That would translate here into:

- doing everything suggested above to minimize tax
- selling say 1/3rd (which you could split over 2 tax years) so that you know you have put "some money in the bank" whatever happens
- work out what the extra Expense Ratio is actually costing you p.a. - it might not be that much

If you want to get a bit too analytical then a Value fund almost certainly offsets the positions in this Fidelity fund. Basically an all-cap Value or Large Cap Value will offset the positions, underweighting them relative to index. Add the 2 funds together and you have pretty much an index (albeit less efficiently if in a taxable account, because of the higher turnover of the 2 funds than a total market fund would have).

dekecarver
Posts: 444
Joined: Mon Feb 22, 2010 10:24 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by dekecarver » Mon Oct 21, 2019 4:55 am

livesoft wrote:
Sun Oct 20, 2019 1:27 pm
Standard advice for getting out of a taxable investment that has large unrealized capital gains:

1. Stop any automatic reinvesting if that is used.

2. Give away shares to charity.

3. Give away shares to children or others that would pay lower taxes and have them sell it.

4. Sell shares later when in a lower tax bracket.

5. Sell shares over many years.

6. If one has carryover losses from other investments, then sell shares.

7. Combinations of all of the above.
OP I apologize for hopping in to your thread but I'm in the same boat with the VG Health Care fund with about the same numbers and thought of now using the fund for kid's edu (4 years out) and would appreciate livesoft's/others response to: In regards to #3, is this a matter of just gifting or transferring the account to the kid and is there a tax efficient age (child) at which this could/should be done?

Topic Author
clammyhands
Posts: 28
Joined: Sat Oct 19, 2019 9:36 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by clammyhands » Mon Oct 21, 2019 6:29 am

JW-Retired wrote:
Sun Oct 20, 2019 10:53 am
clammyhands wrote:
Sat Oct 19, 2019 9:49 am
Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill.
FBGRX gains were just average not "really good" luck. Looks like it has lagged the SP500 only modestly since 2002. That's not bad for a fund with a 0.80% ER. That ER is highish for us Bogleheads but it takes many years to do a lot of damage.

IMO, there is no hurry to dump this fund. Certainly turn off reinvestment of the earnings of the fund, but if it's going to cost you significant money to sell it, I would keep that money and invest that amount in low cost funds in your taxable account instead.
JW
Are you assuming some kind of tax scenario? It seemed to me that this fund outperformed the S&P500 from 2002 and onward (319.61% vs. 271.31%) but I'm not sure if that takes into account all tax implications.

Thanks for your advice!

Topic Author
clammyhands
Posts: 28
Joined: Sat Oct 19, 2019 9:36 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by clammyhands » Mon Oct 21, 2019 6:36 am

There is some great advice here. Thank you all!

Rudedog
Posts: 211
Joined: Wed Aug 01, 2018 3:15 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Rudedog » Mon Oct 21, 2019 6:58 am

FYI--many of these mutual funds have significant positions in Apple, Amazon, Google, Microsoft, Facebook, Netflix...........I'm just sayin'.
Last edited by Rudedog on Mon Oct 21, 2019 6:59 am, edited 1 time in total.

User avatar
Wiggums
Posts: 2910
Joined: Thu Jan 31, 2019 8:02 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Wiggums » Mon Oct 21, 2019 6:59 am

livesoft wrote:
Sun Oct 20, 2019 1:27 pm
Standard advice for getting out of a taxable investment that has large unrealized capital gains:

1. Stop any automatic reinvesting if that is used.

2. Give away shares to charity.

3. Give away shares to children or others that would pay lower taxes and have them sell it.

4. Sell shares later when in a lower tax bracket.

5. Sell shares over many years.

6. If one has carryover losses from other investments, then sell shares.

7. Combinations of all of the above.
All good suggestions.

There is nothing wrong with the fund that would require immediate action. Those very large companies are not going anywhere. They have a lot of cash and are very profitable.

student
Posts: 4792
Joined: Fri Apr 03, 2015 6:58 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by student » Mon Oct 21, 2019 7:58 am

The ER is ok for an active fund. I would do the following.

1) Stop reinvesting.
2) Look at the cost basis and sell any that have a loss (from reinvesting) to get tax benefits.

JW-Retired
Posts: 7178
Joined: Sun Dec 16, 2007 12:25 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by JW-Retired » Mon Oct 21, 2019 10:47 am

clammyhands wrote:
Mon Oct 21, 2019 6:29 am
JW-Retired wrote:
Sun Oct 20, 2019 10:53 am
clammyhands wrote:
Sat Oct 19, 2019 9:49 am
Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill.
FBGRX gains were just average not "really good" luck. Looks like it has lagged the SP500 only modestly since 2002. That's not bad for a fund with a 0.80% ER. That ER is highish for us Bogleheads but it takes many years to do a lot of damage.
.................
JW
Are you assuming some kind of tax scenario? It seemed to me that this fund outperformed the S&P500 from 2002 and onward (319.61% vs. 271.31%) but I'm not sure if that takes into account all tax implications.
??? No tax scenario. I just went to yahoo finance and did this: https://finance.yahoo.com/quote/FBGRX/chart?

It indicated it went from Sept 2, 2002 to Sept 2, 2019. (GSPC is SP500)
JW
Retired at Last

livesoft
Posts: 71320
Joined: Thu Mar 01, 2007 8:00 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by livesoft » Mon Oct 21, 2019 12:16 pm

dekecarver wrote:
Mon Oct 21, 2019 4:55 am
...
3. Give away shares to children or others that would pay lower taxes and have them sell it.
...
OP I apologize for hopping in to your thread but I'm in the same boat with the VG Health Care fund with about the same numbers and thought of now using the fund for kid's edu (4 years out) and would appreciate livesoft's/others response to: In regards to #3, is this a matter of just gifting or transferring the account to the kid and is there a tax efficient age (child) at which this could/should be done?
Mechanically, it is just transferring the identified shares "in-kind" to the recipient. The recipient gets the cost basis and date(s) acquired of the gifted shares.

So how many shares to transfer might depend on how the recipient intends to spend the money, what their taxes would be if/when they sold some shares, and whether the student intends to spend the money on college expenses or if they intend to not apply for any financial aid. Standard gift limits apply, too.
Last edited by livesoft on Mon Oct 21, 2019 11:15 pm, edited 1 time in total.
Wiki This signature message sponsored by sscritic: Learn to fish.

Topic Author
clammyhands
Posts: 28
Joined: Sat Oct 19, 2019 9:36 am

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by clammyhands » Mon Oct 21, 2019 6:10 pm

JW-Retired wrote:
Mon Oct 21, 2019 10:47 am
clammyhands wrote:
Mon Oct 21, 2019 6:29 am
JW-Retired wrote:
Sun Oct 20, 2019 10:53 am
clammyhands wrote:
Sat Oct 19, 2019 9:49 am
Luckily, the fund has had really good gains since then. However, I'm rather worried this luck will run out due to the lack of diversity and high expense ratio moving forward. I'd rather her sell the fund and move the proceeds into a low-cost index fund, but only if it makes sense from a tax perspective. If we sell it we're going to be hit with a pretty big tax bill.
FBGRX gains were just average not "really good" luck. Looks like it has lagged the SP500 only modestly since 2002. That's not bad for a fund with a 0.80% ER. That ER is highish for us Bogleheads but it takes many years to do a lot of damage.
.................
JW
Are you assuming some kind of tax scenario? It seemed to me that this fund outperformed the S&P500 from 2002 and onward (319.61% vs. 271.31%) but I'm not sure if that takes into account all tax implications.
??? No tax scenario. I just went to yahoo finance and did this: https://finance.yahoo.com/quote/FBGRX/chart?

It indicated it went from Sept 2, 2002 to Sept 2, 2019. (GSPC is SP500)
JW
Interesting. I compared them through Morningstar. Morningstar shows the funds returns as much more robust. I wonder why there's such a large difference.

Prettyfrtnt
Posts: 157
Joined: Fri Aug 23, 2019 6:28 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by Prettyfrtnt » Mon Oct 21, 2019 9:26 pm

livesoft wrote:
Sun Oct 20, 2019 1:27 pm
Standard advice for getting out of a taxable investment that has large unrealized capital gains:

1. Stop any automatic reinvesting if that is used.

2. Give away shares to charity.

3. Give away shares to children or others that would pay lower taxes and have them sell it.

4. Sell shares later when in a lower tax bracket.

5. Sell shares over many years.

6. If one has carryover losses from other investments, then sell shares.

7. Combinations of all of the above.
Absolutely great advice I have screenshot it!!

The real key to this question is that the OP really hasn’t presented enough info. Like with all BH questions understanding his other assets, debt, income, future spending needs, future and current tax brackets.

With this info he could be guided down 1-7 options.

Let’s presume this is money in a large NW expected to go to heirs then this could just be kept. Alternatively let’s presume he needs this for a house down payment. Then he would need to draw it down evenly over the timeframe.

For me the idea of tax arbitrage as $15000/30000 gifts of highly appreciated stock to family members in need in low cap gain zones is nice.

With cost basis if you need the money... higher cost basis money is simply much better. Amount in fund - (cap gains * tax rate). Paying capital gains resets the basis and makes the value of the investment better moving forward with money you want to spend in your lifetime.

User avatar
1789
Posts: 1258
Joined: Fri Aug 16, 2019 3:31 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by 1789 » Tue Oct 22, 2019 10:30 am

Its best to get rid of it with the steps livesoft mentioned.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

blueskytoo
Posts: 20
Joined: Thu Feb 07, 2019 8:48 pm

Re: Large Position in Fidelity Blue Chip (FBGRX)

Post by blueskytoo » Tue Oct 22, 2019 2:33 pm

I did not read all the posts since start, but there is one issue no one seemed to address.

You stated that the fund has been pouring out capital gains distributions over the years.

The gains shown in the account include the already taxed gains, and the unrealized gains. I keep track of the REAL cost basis each year at tax time, adding the taxed gains to the cost basis, This is much higher than the original cost basis, and the amount that will be the basis at time of sale.

You very likely have much smaller TAXABLE gains in the account than you believe.

I hope that you keep your tax forms so you can go back and determine how much of the value has already been taxed, and establish your true present cost basis..

Post Reply