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Level 1
June 4, 2019
Solved

Why is my sale of Tax exempt mutual fund treated as capital gain?

  • June 4, 2019
  • 2 replies
  • 27 views

I got a 1099-B form from USAA showing I had liquidated $15000 on 3-19-2016. TurboTax is showing this as taxable event

Best answer by MR_ED

The tax exempt dividend paid by the fund is not taxable but any capital gain if you sell shares is a taxable event.

2 replies

MR_ED
MR_EDAnswer
Level 5
June 4, 2019

The tax exempt dividend paid by the fund is not taxable but any capital gain if you sell shares is a taxable event.

Alumni - Champ
June 4, 2019

It is a taxable event.  On (as example) tax free bonds, the interest is tax free.  The gain on sale is not.