An investor buys 100 shares in a mutual fund on january 1


An investor buys 100 shares in a mutual fund on January 1, 2012, for $60 each. The fund earns dividends of $2.50 and $4 per share during 2012 and 2013. These are reinvested in the fund. Its realized capital gains in 2012 and 2013 are $4 per share and $5 per share, respectively. The investor sells the shares in the fund during 2014 for $70per share. Explain how the investor is taxed.

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Financial Management: An investor buys 100 shares in a mutual fund on january 1
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