club_cafe: Time based vs Snapshot- Definition?

iras1 on

I don't believe mutual funds use time-based. I think they use snapshot. That's why you hear of people complaining that they bought the mutual fund on December 1 and suddenly have all this tax to pay when the fund makes its distribution in mid-December.

In other words, the mutual fund uses your ownership percentage on the distribution date, not your ownership percentage on the date(s) the underlying earnings were realized.

Ira Smilovitz

In a message dated 01/24/08 10:10:06 A.M. Eastern Standard Time, generooks@cfl.rr.com writes:

Randy, mutual funds also use Time Based earnings. What time based means is
you are allocated only your ownership share percentage of capital gains,
losses, expenses, and income of the club that occur while you are a member.

Start the year off right. Easy ways to stay in shape in the new year.

Rip West on

Mutual funds and partnerships are not comparable. Partnerships allocate all income/expenses to its members, whether or not distributed. Mutual funds do not do this. They do distribute all earnings, and each shareholder gets a distribution proportionate to his/her ownership at the time of distribution.

It was because of this confusion that IClub changed the terminology from Distribution of Earnings [DOE] to Allocation of Earnings [AOE].

Rip West
Saint Paul, MN

Gene Rooks on

I stand corrected on that point - again ;-) Thanks, Ira

Gene

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