
About this episode
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and CFP designation. He is passionate about opening up information to help everyone prepare better for financial certification exams. This episode covers content for the Series 6 Exam.
In this episode you will learn:
- The difference between a mutual fund's dividend distributions and capital gains distributions.
- Why both dividend and capital gains distributions are taxable in the year they are received, even when they are reinvested.
- The critical rule that capital gains distributions from a fund are always taxed as long-term gains to the shareholder.
- How a mutual fund's ex-dividend date works and why the Net Asset Value (NAV) drops by the distribution amount.
- The definition of "selling a dividend," why it's a prohibited practice, and how it creates a tax liability without any economic benefit.
For more resources visit https://open-exam-prep.com/ and connect on LinkedIn at https://linkedin.com/in/chenran818
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