Home › Forums › Financial Markets/Economics › Money Manager vs. Personal Trading (tax issue)
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SK in CV.
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October 29, 2009 at 12:32 PM #16578October 29, 2009 at 12:56 PM #475386
(former)FormerSanDiegan
ParticipantIs this assumption correct?
Generally, No.
You will have again or a loss each time you sell a position. You will pay taxes on the net gain each year (long-term and short-term gains are treated differently). This is regardless of whether you manage the funds or not. I assume that this is a money manager who is buying and selling stocks, etc.However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
disclaimer : I am not a tax lawyer or a financial advisor. The advice above is based on personal experience.
October 29, 2009 at 12:56 PM #476226ParticipantIs this assumption correct?
Generally, No.
You will have again or a loss each time you sell a position. You will pay taxes on the net gain each year (long-term and short-term gains are treated differently). This is regardless of whether you manage the funds or not. I assume that this is a money manager who is buying and selling stocks, etc.However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
disclaimer : I am not a tax lawyer or a financial advisor. The advice above is based on personal experience.
October 29, 2009 at 12:56 PM #475563ParticipantIs this assumption correct?
Generally, No.
You will have again or a loss each time you sell a position. You will pay taxes on the net gain each year (long-term and short-term gains are treated differently). This is regardless of whether you manage the funds or not. I assume that this is a money manager who is buying and selling stocks, etc.However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
disclaimer : I am not a tax lawyer or a financial advisor. The advice above is based on personal experience.
October 29, 2009 at 12:56 PM #476001ParticipantIs this assumption correct?
Generally, No.
You will have again or a loss each time you sell a position. You will pay taxes on the net gain each year (long-term and short-term gains are treated differently). This is regardless of whether you manage the funds or not. I assume that this is a money manager who is buying and selling stocks, etc.However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
disclaimer : I am not a tax lawyer or a financial advisor. The advice above is based on personal experience.
October 29, 2009 at 12:56 PM #475925ParticipantIs this assumption correct?
Generally, No.
You will have again or a loss each time you sell a position. You will pay taxes on the net gain each year (long-term and short-term gains are treated differently). This is regardless of whether you manage the funds or not. I assume that this is a money manager who is buying and selling stocks, etc.However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
disclaimer : I am not a tax lawyer or a financial advisor. The advice above is based on personal experience.
October 29, 2009 at 4:08 PM #476019ucodegen
ParticipantQuick question about the tax implications of these two options. My assumption (and I could very well be wrong) is that if I hire a money manager to invest for me, that I’m not taxed on the increase in my portfolio until I choose to sell/cash out.
No. It is the same as if you had done the trades yourself. You should get a 1099 or equiv showing a breakdown in long and short term gains as shown above. In using a money manager, you are paying for their ‘expertise’ in making investment decisions.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
yes.. see: http://www.fool.com/investing/etf/2006/10/27/etfs-can-be-taxing.aspx
However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
Kind of.. gets more complicated..
http://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Learn-More-About-Taxes/Tax-Issues-for-Mutual-Fund-InvestorsOctober 29, 2009 at 4:08 PM #476318ParticipantQuick question about the tax implications of these two options. My assumption (and I could very well be wrong) is that if I hire a money manager to invest for me, that I’m not taxed on the increase in my portfolio until I choose to sell/cash out.
No. It is the same as if you had done the trades yourself. You should get a 1099 or equiv showing a breakdown in long and short term gains as shown above. In using a money manager, you are paying for their ‘expertise’ in making investment decisions.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
yes.. see: http://www.fool.com/investing/etf/2006/10/27/etfs-can-be-taxing.aspx
However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
Kind of.. gets more complicated..
http://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Learn-More-About-Taxes/Tax-Issues-for-Mutual-Fund-InvestorsOctober 29, 2009 at 4:08 PM #476095ParticipantQuick question about the tax implications of these two options. My assumption (and I could very well be wrong) is that if I hire a money manager to invest for me, that I’m not taxed on the increase in my portfolio until I choose to sell/cash out.
No. It is the same as if you had done the trades yourself. You should get a 1099 or equiv showing a breakdown in long and short term gains as shown above. In using a money manager, you are paying for their ‘expertise’ in making investment decisions.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
yes.. see: http://www.fool.com/investing/etf/2006/10/27/etfs-can-be-taxing.aspx
However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
Kind of.. gets more complicated..
http://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Learn-More-About-Taxes/Tax-Issues-for-Mutual-Fund-InvestorsOctober 29, 2009 at 4:08 PM #475657ParticipantQuick question about the tax implications of these two options. My assumption (and I could very well be wrong) is that if I hire a money manager to invest for me, that I’m not taxed on the increase in my portfolio until I choose to sell/cash out.
No. It is the same as if you had done the trades yourself. You should get a 1099 or equiv showing a breakdown in long and short term gains as shown above. In using a money manager, you are paying for their ‘expertise’ in making investment decisions.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
yes.. see: http://www.fool.com/investing/etf/2006/10/27/etfs-can-be-taxing.aspx
However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
Kind of.. gets more complicated..
http://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Learn-More-About-Taxes/Tax-Issues-for-Mutual-Fund-InvestorsOctober 29, 2009 at 4:08 PM #475481ParticipantQuick question about the tax implications of these two options. My assumption (and I could very well be wrong) is that if I hire a money manager to invest for me, that I’m not taxed on the increase in my portfolio until I choose to sell/cash out.
No. It is the same as if you had done the trades yourself. You should get a 1099 or equiv showing a breakdown in long and short term gains as shown above. In using a money manager, you are paying for their ‘expertise’ in making investment decisions.
If so, is there a way to manage your own money/investments without paying taxes until you cash out or something similar?
Yes, well sort of … Build a portfolio based on index ETFs and hold without selling. You will have dividends, but no captial gains until you sell.
yes.. see: http://www.fool.com/investing/etf/2006/10/27/etfs-can-be-taxing.aspx
However, if the money manager takes your funds and puts them in a pool, e.g. a mutual fund, then you are taxed each year based on the net gains/losses incurred by that fund in each year.
Kind of.. gets more complicated..
http://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Learn-More-About-Taxes/Tax-Issues-for-Mutual-Fund-InvestorsOctober 29, 2009 at 4:58 PM #475672Participantucodegen – good point on tax treatment of Mutual funds. Depends on the trades the fund makes and ultimately the type and timing of distributions.
These distributions happen typically in December.
Something to definitely be aware of, since you can pay taxes on a capital gain distribution that the fund makes even if you don’t have any gain personally. It’s a non-event for tax-deferred accounts, but in taxable accounts it sucks.I generally prefer ETFs, so that I can control the tax consequences more directly.
October 29, 2009 at 4:58 PM #476034Participantucodegen – good point on tax treatment of Mutual funds. Depends on the trades the fund makes and ultimately the type and timing of distributions.
These distributions happen typically in December.
Something to definitely be aware of, since you can pay taxes on a capital gain distribution that the fund makes even if you don’t have any gain personally. It’s a non-event for tax-deferred accounts, but in taxable accounts it sucks.I generally prefer ETFs, so that I can control the tax consequences more directly.
October 29, 2009 at 4:58 PM #476110Participantucodegen – good point on tax treatment of Mutual funds. Depends on the trades the fund makes and ultimately the type and timing of distributions.
These distributions happen typically in December.
Something to definitely be aware of, since you can pay taxes on a capital gain distribution that the fund makes even if you don’t have any gain personally. It’s a non-event for tax-deferred accounts, but in taxable accounts it sucks.I generally prefer ETFs, so that I can control the tax consequences more directly.
October 29, 2009 at 4:58 PM #475496Participantucodegen – good point on tax treatment of Mutual funds. Depends on the trades the fund makes and ultimately the type and timing of distributions.
These distributions happen typically in December.
Something to definitely be aware of, since you can pay taxes on a capital gain distribution that the fund makes even if you don’t have any gain personally. It’s a non-event for tax-deferred accounts, but in taxable accounts it sucks.I generally prefer ETFs, so that I can control the tax consequences more directly.
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