Boom in Bitcoin, stock market triggers explosion in 2021 taxable gains – Detroit Free Press

It’s a word you might offer, according to the Urban Dictionary, to a co-worker who has accepted a job promotion that is a mixed blessing.

One small plus side to this story: The investor lives in Florida, which does not have a state income tax.

Cordes has heard of clients elsewhere facing even bigger tax bills due to massive capital gains distributions.

About 53% of the mutual funds based in the United States, including exchange traded funds, reported capital gains distributions for 2021.

How many funds pay out such distributions varies  year to year.

Take this easy math example.

For the taxpayer, a short-term distribution would be taxed at the individual’s ordinary income tax rate.

In general, the more active a fund manager is with trading, the more likely the fund would distribute short-term gains.

…Read the full story