Form 1099-B, long used to report stock and mutual fund-sales prices, will be expanded in 2011 (2012 for mutual-fund shares) to include the cost or other basis of stock and mutual-fund shares sold or exchanged during the year.
To be fair, mutual fund investors should be liable for capital gains only when they actually sell their mutual fund shares.
In the mutual fund context, ownership of shares in an equity mutual fund is generally considered the equivalent of owning equities.
Market timing is the rapid trading of mutual-fund shares in order to take advantage of the gap between the price of a fund, which is set once a day, and the continuous changes in the value of the underlying portfolio of securities.
Roseen's report isn't about the taxes investors pay when they sell mutual fund shares for a profit.
Late trading is the illegal practice of buying or selling mutual-fund shares at the trading day's price after the market has closed.
"It makes people not trust that whole system, " says Mr. Koyle, who owns some mutual-fund shares but has most of his money invested in farmland.
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And when you have a money market mutual fund, it is not FDIC insured, but the companies will do whatever they can to protect the value of their money market mutual fund shares.
There have been two big investigations since then, one involving hedge funds being allowed to market-time trades in mutual fund shares, and the other involving insider trading in PIPEs, or public investments in private equity.
Firms will have to give the information to investors and the IRS on Forms 1099-B for stocks they sell for customers, starting with those bought on or after Jan. 1, 2011 (mutual-fund shares bought on or after Jan. 1, 2012).
The scandal was triggered when New York Attorney General Eliot Spitzer revealed a scheme under which Nations Funds, advised by Banc of America Capital Management, a unit of Bank of America (nyse: BAC - news - people ), permitted hedge fund Canary Capital to trade mutual fund shares at prices that had already been set at the day's close.
In such a case, one might anticipate the following: When the information alleged above became public knowledge, the fund suffered irreparable reputational damage and many of the U.S.investors sold their shares in the mutual fund causing the value of the traded shares to plummet.
But even before the Bank of Commerce debacle, he was tarnished by allegations over the past year that he got a sweetheart deal to buy shares in Mutual Fund Co. in 1991.
Mutual fund investors call the fund company and their shares are redeemed immediately, as is required under the federal securities laws.
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The complaint would also allege that the plaintiff purchased shares in the mutual fund without knowing anything about Shariah other than what the defendants represented to the public.
Because many shareholders own their shares through a mutual fund, a pension plan, or other investment pool actively managed by a third party, they are indirect or passive owners.
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Instead of owning 3.45 shares of this car company and 1.19 shares of that chemical company and so on, you own 100 shares of a mutual fund that has 40 stocks in it.
Before the new rules a mutual fund or hedge fund that wanted to dump 100, 000 shares of Microsoft quickly could, for example, bypass the New York Stock Exchange and sell them all at once on a different exchange if it saw an open order to buy 100, 000 shares--even if the offer price on the NYSE was a nickel higher.
Before the new rules a mutual fund or hedge fund that wanted to dump 100, 000 shares of Microsoft (nasdaq: MSFT - news - people ) quickly could, for example, bypass the New York Stock Exchange and sell them all at once on a different exchange if it saw an open order to buy 100, 000 shares--even if the offer price on the NYSE was a nickel higher.
Mutual-fund analysts say it is uncommon for mutual funds to flip shares so quickly.
Finally, on the brokerage front, it appears that investigations into mutual fund marketing practices, such as directing commissions to brokers that sell fund shares, may have an impact upon institutional commission rates.
An alternative, some investors say, is to purchase shares in a closed-end mutual fund that owns bullion.
Is it time to load up on shares of this commodity-focused mutual fund company or to sell it short?
Like individual stocks, a mutual fund allows investors to sell their shares on any trading day and convert their holdings to cash.
U.S. stocks still ended the day with sharp losses, but a last-hour rally cut the deficit in the blue-chip barometer by more than half as professional investors seem to have stepped in and picked up shares dumped by unhappy mutual- and hedge-fund shareholders.
Would you fill up your brokerage account with shares of what Morningstar calls the 291st best mutual fund?
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After all, a mutual fund is always required to buy back your shares but no one is required to buy back your individual bond.
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Shares in Washington Mutual jumped late Thursday after a British hedge fund, which has shown interest in the troubled U.S. lender before, said it had acquired a 6.0% stake.
Calculating cost basis is trickier if shares are bought with reinvested dividends, such as in a mutual fund or DRIP, or if stock splits or spinoffs cause adjustments.
With REITs, an investor can buy shares on an open exchange or invest in a real estate focused mutual fund, partaking in a highly liquid way of investing in real estate.
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