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Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Reallocated stock mutual fund to bond mutual fund

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Will tax be incurred if I reallocate a stock mutual fund to a bond mutual fund in the same account with the same company?

Hello Bruce,

Regardless of whether or not the transaction is taking place in the same account or with the same financial institution, you are basically selling one mutual fund and buying another. Therefore any capital gain or loss on the sale of the first mututal fund is taxable in the year the sale is made. If you have held the stock mutual fund for one year or more, any capital gains would be taxed at the long term capital gains tax rate which is currently capped at 15%.

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Thanks and please let me know if you have additional questions.

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