If you invest in mutual funds, be aware of some potential pitfalls involved in buying and selling shares.
You may already have made taxable “sales” of part of your mutual fund investment without knowing it.
One way this can happen is if your mutual fund allows you to write checks against your fund investment. Every time you write a check against your mutual fund account, you’ve made a partial sale of your interest in the fund. Thus, except for funds such as money market funds, for which share value remains constant, you may have taxable gain (or a deductible loss) when you write a check. And each such sale is a separate transaction that must be reported on your tax return.