Are taxes owed on the proceeds from an exchange of mutual funds and when I cash out the fund?

[Critter]

You may think it is an exchange but you technically had a reportable  taxable  sale and a purchase. 

[TomYoung]

Commonly if mutual funds are "exchanged" within the same fund family - fund manager is burying a poor-performing fund or your shares are exchanged for shares within the same fund but with a different class - those sort of exchanges are usually tax-free and your basis simply carries over to your new shares.  But "cashing out" a fund is always a sale and needs to be reported on your income tax return.

You should receive a 1099-B from the fund manager for all sales.  Whether you "owe taxes" or not depends on whether you report a gain or a loss.

[Critter]

When you exchange in the same fund family this is always a sale and a purchase ... the reason for doing it  is for the reduced or free cost by the broker. 

[55Chevy1980]

Thank you