Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Mutual Funds

Avoiding Mutual Fund Cap Gains This Year; Preparing for a Better 2011

Your article was successfully shared with the contacts you provided.


There are a couple of business issues I like to ponder this time each year. Can I avoid any mutual fund capital gains distributions, typically slated for December, and how can I make 2011 better than 2010? The second question is much more difficult, so we'll start with the first.

Most mutual funds make their annual capital gains distribution in December. In 2008, there were little if any distributions. In 2009 there were some, but many clients had capital losses to use, so the tax hit was minimal. Even for tax year 2010, there are probably a lot of capital loss carry-forwards to utilize, but what if this is not the case?

To help clients retain more of their wealth, consider discarding certain funds before their record date. That's the date by which a fund determines who is entitled to the distribution. One sure thing is to not buy a fund this late in the year if a capital gain is expected. Why? Because your client will be responsible for paying taxes on the underlying performance of the fund, even though that client didn't participate in the gains. If there are some funds you've been thinking about dumping, now may be a good time to do so.

Preparing for an Improved 2011

In my opening paragraph, I said the second question—How can I make 2011 better than 2010?—was much more difficult. That's because it involves a broader range of issues. For example, now is the time to examine your income and expenses for the current year and prepare a budget for the following year. Now is also the time to reevaluate your marketing plan and consider any changes. It's also a good time to take another look at the software you use to see if there is anything on the market that will improve client relations and make you more productive. I've mentioned that I have a new website coming. I also spoke about using Well, if everything goes well, I should begin using Salesforce on December 1st. I am very impressed with its platform. There is also a large number of apps which coordinate with the software; Salesforce may well be the iPhone of the CRM world.

To summarize, I am using the month of December to plan and prepare for 2011. There is so much to do and so little time!

What things are you doing to prepare for 2011?Why not share it with the readers?


Have a great week!


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.