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Financial Questions and Answers

Q: How are distributions and gains on mutual fund investments treated from a tax perspective?

A: Potential taxable events include distributions from the mutual fund, as well as any capital gains you may recognize if you sell your interest in the fund. Taxable distributions from the fund may come in different forms, including capital gains or dividends, with each receiving different treatment under the tax law. Short-term capital gain (from assets held for one year or less) and nonqualified dividends are taxed at your ordinary income tax rate. In contrast, long-term capital gain and qualified dividends will be taxed at 0%, 15%, and 20%, depending on your tax bracket. The Form 1099 DIV issued by the mutual fund for the year will identify taxable and nontaxable distributions.


Q: I plan to hold training sessions for a group of my local employees at a hotel near our main office. It’s important that they stay at the hotel overnight to facilitate the training. Can my company deduct the cost of their rooms?

A: Local lodging expenses may be deductible if the lodging is necessary for the employees to participate fully in or be available for a bona fide business meeting, conference, training activity, or other business function. Certain additional tax law requirements apply.

July 2017 Newsletter Previous Article