Selling a mutual fund long term to avoid capital gains tax?

My long term capital gains tax is 0%. Can I sell a mutual fund and buy the same one back before the year is over to realize the gains tax free?

So for instance, if my long term mutual fund "xyz" goes from 1000 to 1200 (thus a profit of 200), can I sell "xyz" and buy it back in the same week without getting in trouble with the IRS?

Essentially, my goal is to keep the mutual fund but "pay" my 0% capital gains tax now instead of 20 years down the line when the value of the mutual fund is higher.

4 Answers

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  • 2 months ago
    Favorite Answer

    As long as you have a gain and pay whatever tax is appropriate now, even if that is indeed 0%, you should be fine.

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  • Judy
    Lv 7
    2 months ago

    Same week, no. Same year, yes. A mutual fund follows the same rules on wash sales as an individual stock.

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  • 2 months ago

    Make sure you know what you are doing. The problem with selling something and then buying the same thing again soon, especially if you are doing it for tax reasons, is the "wash sale" rules. Read more about the "wash sale" rules before you do this.

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  • Anonymous
    2 months ago

    No. You have a profit of $200 to claim on your tax return. When you realize that gain during the year makes no difference.

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