Explain how the investor is taxed


Problem:

Investor buys 100 shares in a mutual fund on January 1 2009 for $50 each the fund earns dividends $ 2 and $ 3 per share during the 2009 and 2010. These are reinvested in the fund. Its capital gains in 2009 and 2010. These are the reinvested in the fund. Its capital gains in 2009 and 2010 are $5 per share respectively. The investor sells the share in the fund during 2011 for $59 per share. Explain how the investor is taxed.

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Finance Basics: Explain how the investor is taxed
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