Deferring Capital Gains Tax on Reinvested Mutual Fund Dividends
New rules allow individuals to postpone paying tax on capital gains if these gains from mutual funds are automatically reinvested into additional shares. The tax will only be due when these shares are sold or upon the investor's death. This aims to encourage long-term retirement savings.
Key points
You can defer paying tax on capital gains from mutual funds if you reinvest them into the same funds.
Tax on reinvested gains will only be due when you sell the shares or upon your death.
These rules do not apply to individuals claimed as dependents by other taxpayers, nor to estates or trusts.
Introduced
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