I don’t know why, but this is the first year that no one seems to understand how capital gains work. I have had to explain them to at least four people this year. Versus the usual one to none.
I am not talking about stocks where you buy low and sell high, they seem to get that concept. What they are not getting is mutual fund capital gains.
Mutual funds generate capital gains the same as everyone else. They sell holdings for more than they spent.
You as an owner may have not bought or sold any fund shares, but you will participate in your prorated capital gains. The same is true with interest and dividends.
Qualified dividends are calculated the same way for funds as individuals, investments held over a year.
So when you have reportable gains and dividends and did not get the money, you most likely signed up for reinvestment of such. Most are taxable as well, as defined by the holding. So plan accordingly.
Call and we can assist with estimated payments if necessary.