With the excellent stock returns from 2023 to 2025, many mutual funds are making Long Term Capital Gains (LTCG) distributions in 2025. For 2025, I expect to receive the highest LTCG distribution since we started owning the funds in 2021.
It's good because we are receiving almost 3X what we received last year, reflecting that the mutual funds have done well this year. It's bad because I didn't find out estimates of the LTCG distributions until November and won't be sure until the end of December of the amount, since some of the November estimates have been low. As a result, our estimated tax liability for 2025 is slightly higher than I anticipated.
However, since we are still a couple weeks away from the end of 2025, we can sell some positions for a loss and/or make some charitable contributions in 2025 instead of waiting until 2026. That way, we can reduce our tax liability for 2025 by taking these actions before the end of the year..
For more on The Practice of Personal Finance, check back every Wednesday for a new segment.
This is not financial nor tax advice. Please consult a professional advisor.
Copyright © 2025 Achievement Catalyst, LLC
Subscribe to My Wealth Builder
No comments:
Post a Comment