A: (Paul) Unicredito Italiano,
Italy's second largest banking group, completed its acquisition of the The
Pioneer Group on October 23, 2000. The performance of the Pioneer Funds should
not be impacted by this development.
The more appropriate question, Joe, is whether there are any funds within
this family that satisfies your Investment objective. You can visit their
website at: www.pioneerinvestments.com
and review their offerings and performance.
Regarding whether you should be considering bonds, the answer is yes, but the
allocation to fixed income depends on your risk tolerance level, your age and
years to retirement.
What taxes would I owe if I took money out of a non-IRA growth
fund?
from John
Q: Could you please explain in today's terms what taxes I would pay
every time I take out money from a non IRA growth fund. Lets say I have 600k in
funds and I earn 10% this year and take out 60k and don't have income from any
other source.
Is it capital gains, or are there other taxes? What would I have left to
actually spend?
A: (Greg) Thanks for the question,
John. I see three sources of taxable income flowing from this non-IRA growth
fund.
First, the stocks owned by the growth fund might produce some dividends.
These dividends are taxable to the owners of the fund and will be reported to
the owners at the end of the year on a 1099-DIV.
Second, the manager of the fund will be doing some buying and selling of
stocks and this will produce capital gains. Note that what I am talking about is
internal fund activity, not your purchase and sale of fund shares (which is
discussed next). Like dividends, the capital gains incurred inside the fund are
taxable to the owners of the fund and will be reported at the end of the year on
the same 1099-DIV.
Third, your withdrawals from the fund will be taxable as capital gains. The
amount of capital gains will be determined by subtracting the amount you have
invested in the shares (including the dividends and capital gains your were
taxed on above) from the amount you received upon selling the shares at the time
of withdrawal. Consequently, the $60,000 you withdraw from the fund will only be
partially taxable because it is not all gain. To the extent it is gain it will
be taxed at 20% as long as the fund shares were held for 12 months.
Important Disclaimer
Investing in equities involves a serious
principal risk, and no assurance can be given that the techniques described here
will be successful. Returns vary and you may have a gain or loss when you sell
your shares. Past performance is no guarantee of future results. Index returns
shown are historical and include the change in share price, reinvestment of
dividends, and capital gains. Indexes are unmanaged and do not reflect the
impact of transaction costs. Transaction costs would have reduced the total
returns.
International investments, especially those in
emerging markets, entail greater risks (as well as greater potential rewards)
than U.S. investing. These risks include political and economic uncertainties of
foreign countries, as well as the risk of currency fluctuations. These risks are
magnified in countries with emerging markets, since these countries may have
relatively unstable governments and less-established markets and economies.
Lastly, the questions and responses set forth
here are for general informational purposes only and are not intended to
substitute for performing your own independent research or contacting your
financial or legal professional before making any investment decisions. We make
no guarantees as to the performance of any investment strategy you choose and
are not responsible for any losses you might incur.
Paul
R. Pignone, CFP, CLU, ChFC, a Financial Advisor and Principal at Boston
Retirement Advisors, Inc., in Salem, New Hampshire, has been involved in
the financial industry since 1978. Paul specializes in retirement and
estate planning, investment management, and business and tax consulting.
He has taught financial planning and investments at high schools and
colleges and has conducted seminars in Retirement and Investment Planning
at Digital, Honeywell, GTE, and many other organizations. Visit Paul's
website 
Gregory
Hilton, J.D., LLM (tax), CPA, CFP is a Fee-OnlyŽ financial planner in
Chicago. Although his services are comprehensive he concentrates on the
tax and investment issues of retirement and estate planning. He is
registered as an investment advisor and maintains membership in NAPFA,
ICFP, and several legal, tax and accounting associations. Greg is a
national instructor on tax and financial issues for the National
Association of Tax Practitioners and is authoring a book on financial
planning for the highly compensated to be published by Commerce Clearing
House. Greg can be reached at (312) 222-9647 or by e-mailing