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If a mutual funds assets earned tax-free dividends, are capital gains tax free when the fund is sold?

April 26, 2017assets capital gains dividends earned Free tax tax-free

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If a mutual funds assets earned tax-free dividends, are capital gains tax free when the fund is sold?

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No. The kind of income the assets in the fund earn is tax-free. When you sell your shares in the fund, a taxable gain or deductible loss is realized on the sale. This is the true also for the sale of tax-exempt securities such as municipal bonds.