How are Mutual Funds Taxed

 The way mutual funds are taxed is different than the tax treatment of other stocks. A mutual fund is similar to a bank account where as you write checks and make an initial deposit. Tax reporting is more difficult than reporting interest on a bank account.
 Mutual funds are taxed at long term capital gains rates if they are held for more than one year. You will be subject to short term capital gains rates (which are higher) if you sell your funds before holding them for at least one year.