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Level 3
posted Mar 23, 2024 10:28:50 AM

Tax liability for liquidating money market funds?

Is there a tax liability for taking money out of VMRXX (Federal) or VMSXX (Municipal) funds? Given that their base price doesn't change from $1.00 per share, there should be no liability, correct?

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1 Replies
Expert Alumni
Mar 26, 2024 9:11:11 AM

Correct, Only the interest earned is reported as taxable income. You already paid tax on the funds invested so removing them does not create a tax consequence.