Series 6 - Investment Company And Variable Contracts Products Representative Exam
An investor purchases shares of a mutual fund. Three months later, the fund has a long-term capital gains distribution. This would be taxed to the investor as:
Net investment incomeB
Short-term capital gainsC
Long-term capital gainsD
It makes no difference how long the investor held the fund shares; this is a distribution of the fund's long-term gains being passed through to the investor. Therefore, the investor will be taxed at a long-term capital gains rate.