Buying and Selling Mutual Funds at Year End ? Be aware of Year-End Distributions

With the year-end upon us, many investors see it as the time to rebalance their investment portfolios.? However, savvy investors need to be aware of just when the timing is ?right? or ?wrong? to make that buy or sell trade happen.

Mutual funds are required by law to distribute the income earned within the fund each year to the shareholders of the mutual funds in the form of dividends and capital gain distributions. ?Typically, the bulk of these distributions occur near year end, late in the month of December.? The dividends and interest earned within the mutual fund as well as capital gains from sales must be distributed to the shareholders.? At the time of the distribution, the net asset value (NAV) of the fund decreases by the amount of the per share distribution because those assets are no longer held within the fund.? The result is taxable income to the shareholder and a reduction in the NAV of the mutual fund.

Thus, the date to be aware of is the ex-dividend date ? the first day that buyers of the mutual fund will not receive the dividend being paid out by a mutual fund.

Buyers will want to wait until after the ex-dividend date to buy into a mutual fund.? After that date they are buying into the fund at a lower NAV, because of the dividend distribution.? If they buy the mutual fund prior to the ex-dividend date, they are buying the fund at the higher NAV, receiving a taxable distribution, and then being left with the mutual fund at the lower NAV.? The major dilemma of purchasing before the ex-dividend date is that although the buyer will receive income in the form of a dividend and/or capital gain distribution, he will also have to report the income on his tax return and pay taxes on that distribution. ???After having been hit with a tax bill on the distribution, the buyer would be left with less money in his wallet than if the mutual fund was simply purchased without the dividend payment.

The opposite is true for sellers.? Sellers want to sell their mutual fund shares before the year-end distribution.? Selling before the ex-dividend date end will result in the entire gain being subject to lower capital gain tax rates.? Waiting until after the ex-dividend date, the seller will receive a taxable distribution.? This scenario would result in income from the sale of the mutual fund being taxed at a capital gain, but the dividend distribution portion being taxed at a higher ordinary income tax rate.

Bottom line is as follows ? buyers want to purchase shares after the ex-dividend date while sellers should sell shares before the ex-dividend date.? Following these rules should help investors to lessen their tax exposure on their mutual fund income.

Tip for new GOP tax plan

Just want to give you this one quick recommendation as the year winds down to save some taxes. Now that it appears there is a very good chance there will be tax law changes enacted into law for 2018, there is one deduction that is essentially being eliminated in 2018 that you can still take advantage of by paying this year. Please consider paying your 2018 real estate taxes for your primary residence and other vacation homes prior to 12/31/17. I?m sure the cities or towns have already had a lot of people asking to prepay their real estate taxes early, so will be able to quickly tell you what to do.

If you still have a mortgage on the property, you will want to notify the mortgage company that you will be paying some of your next year?s taxes on your own. They too have probably received a bunch of calls already asking about this.

Paying real estate taxes due in 2018 prior to 12/31/17 could be the difference between deducting those taxes paid and not deducting them at all. If you have any follow up questions to this strategy, or have heard of other strategies being implemented by other to minimize their taxes under the pending rules, please let us know.

Here are a few links to great recaps about the new tax plan:

Equifax Data Breach – What Our Clients Should So

As you may have heard, Equifax, one of the nation?s three leading credit reporting agencies, announced last week that they had a major data breach from May through July.

The hackers accessed over 143 million consumers? information, including Social Security numbers, birth dates, and addresses. For some consumers, they also stole driver?s license numbers and credit card numbers.

Due to the scope of this data breach and after reviewing the options available to protect your information, we have the following recommendations for our clients. Please also consider doing these steps for all family members, such as elderly parents and children:

1. Place a CREDIT FREEZE on your files.

A credit freeze restricts access to your credit report, which makes it more difficult for thieves to open new accounts in your name.? You can lift the freeze temporarily on your account if you are applying for credit in the future. You MUST keep track of your unique PIN/password to lift a freeze.

Please visit the FTC?s page on Credit Freezes to understand fully how CREDIT FREEZES work:


To place a freeze on your credit reports, you need to contact each of the nationwide credit reporting companies:

Equifax? 1-800-349-9960

Experian? 1?888?397?3742

TransUnion? 1-888-909-8872

You’ll need to supply your name, address, date of birth, Social Security number and other personal information. Fees vary based on where you live, but commonly range from $5 to $10.

Make sure you are entering this info on a secure computer and encrypted network connection (no Wi-Fi Hot Spots!).

After receiving your freeze request, each credit reporting company will send you a unique PIN (personal identification number) or password. Keep the PIN or password in a safe place. You will need it if you choose to lift the freeze.

2. If you decide against a credit freeze, place a FRAUD ALERT on your files.

A fraud alert allows creditors to get a copy of your credit report if they take steps to verify your identity.? Three types of fraud alerts are available:

Initial Fraud Alert.If you’re concerned about identity theft, but haven’t yet become a victim, this fraud alert will protect your credit from unverified access for at least 90 days. You may want to place a fraud alert on your file if your wallet, Social Security card, or other personal, financial or account information are lost or stolen.

Extended Fraud Alert.For victims of identity theft, an extended fraud alert will protect your credit for seven years.

Active Duty Military Alert.For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.


To place a fraud alert on your credit reports, contact one of the nationwide credit reporting companies. A fraud alert is free. You must provide proof of your identity. The company you call must tell the other credit reporting companies; they, in turn, will place an alert on their versions of your report.

3.Check your credit reports:

Visit to get a FREE copy of your credit report each year.

If you don?t recognize an account or activity, go to for steps to take.

4.Visit Equifax?s website to see if you are ?Potentially Impacted? by their breach *AND* ENROLL IN THEIR FREE ONE YEAR CREDIT MONITORING.

Visit to see if your information was potentially exposed.

You will need to enter the last six digits of your Social Security number so make sure to use a secure computer and encrypted network connection when entering your info.

?5.?Monitor your existing credit card and bank accounts closely for any charges you don?t recognize.

It takes a few minutes a month to look over credit card and bank statements. If you do not recognize a charge, contact your credit card company or bank immediately.

For other tips on ?How To Dispute Fraudulent Charges?, please visit

For tips on How to Protect Your Credit Cards from Fraud, please visit

6. File your taxes early, before a scammer can.

Tax identity theft happens when someone files a fraudulent tax return using your Social Security number to try to steal a ?refund? from the government.

You can learn more on Tax ID Theft from the IRS? website at

7 ?Visit ?to learn more about protecting yourself after a data breach.

As always, we?re here to help you year-round. Please reach out to our office if you have any questions. You can email or call us at 781.938.0045.

IRS Withholdings

Many healthcare professionals are employed based on the academic calendar, and therefore, switch jobs or employers around July 1st.? No matter when you change jobs, you need to submit a?W-4 form?with your new employer to determine how much taxes will be withheld from each paycheck.

There are definitely some major flaws associated with completing a W-4 form.? What seems like a very straightforward exercise in paperwork can often result in a surprisingly large overpayment or balance due when you file your taxes the following winter.

Here are a few of the underlying issues with the W-4 form:

  • If you work for more than one employer, each employer withholds taxes as if they are your only employer.? Let’s say you work for 3 employers and earn $20k per employer.? In that situation, you will have significantly less taxes withheld than if you were to work for one employer and earn $60k.
  • If you claim “married” on the W-4, each of your employers will withhold taxes from your salary as if your spouse does NOT work. And the closer your income is to your spouse’s income, the more money you might owe with your tax returns if you both claim Married with a few allowances on your respective W-4s.

Fortunately, our friends at the IRS have created an online tool known as the?IRS Withholding Calculator?to help you complete the W-4 in such a way that you should come close to breaking even on your taxes.? According to the IRS:

If you are an employee, the Withholding Calculator can help you?determine whether you need to give your employer a new?Form W-4, Employee’s Withholding Allowance Certificate?to avoid?having?too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill?out the form.

CAUTION: This Withholding Calculator works for most taxpayers. However, if you owe self-employment tax, alternative minimum tax, or certain Other Taxes; you should use the instructions in?Pub 505, Tax Withholding and Estimated Tax.

Tips For Using This Program

  • Have your most recent pay stubs handy.
  • Have your most recent income tax return handy.
  • Estimate values if necessary, remembering that the results will be no more accurate than the input you provide.

Ready to start? Make sure Java scripting is enabled before using this application.

Withholding Calculator Button

To?Change Your Withholding:

  1. Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate.
  2. Submit?the completed Form?to your employer as soon as possible.


5 Myths Your Landlord Want You To Believe

It can be difficult to discern fact from fiction when dealing with landlords. A misunderstanding of these key issues can have serious consequences for your practice.?The following information should?help?dispel some common myths and prevent costly mistakes in your next lease negotiation.

Myth #1: The Landlord Is On Your Side

Many landlords attempt to befriend their tenants, making it difficult for tenants to remember the landlord?’s?primary goal is financial gain. They are seeking to secure a lease with the tenant paying as much as possible. Even the friendliest landlord wants to make the maximum profit on his?space,?just?like?the?nicest?tenant?seeks?the?lowest?possible lease rate so his business can thrive. Financial burdens quickly arise for tenants who place?undue trust in their landlord and fail to properly negotiate their?lease.?By having representation,?you can learn how your lease compares to the market and ensure you are getting the best possible terms.

Myth #2: You Are Not Entitled to Representation

Some landlords employ intimidation, instead of friendliness, to achieve their goal. The intimidation tactics may include telling tenants they are not allowed to have?representation.?This is not?true.?Lease negotiations are different than negotiating the price of a car or trying to haggle for?a better price at a?flea?market.?They are?complex?transactions,?layered with hidden opportunities for landlords to take advantage of anyone not represented by an expert. Landlords are professionals who are aware of these complexities.?If a landlord says you are not allowed to have representation, that is a clear signal they do not respect your desire to be treated fairly.

Myth #3: You Are Already Getting The Best Possible Rate for Your Space

There are many conditions that factor into lease rates for a commercial space. Things such as current building vacancy, length of the lease, amount?of?tenant?improvement?allowance,?building condition and many other considerations impact the appropriate rate for a particular space. Several of these considerations are specific to spaces for healthcare tenants, highlighting the need for a real estate professional who has expertise in healthcare. Healthcare practices are often told they are getting the best possible rate for their space,?yet they can receive a much better offer from the landlord when an expert assesses these mitigating factors

Myth #4: Your Renewal Is Not Negotiable

Most leases provide an option for the tenant to renew their lease when it expires,?and may even detail the exact terms of the renewal. However, it is important to understand that your?renewal is negotiable, even if you have renewal terms specified in your?current lease. A landlord who says you cannot renegotiate the terms for your renewal is usually doing so because they can get you to pay more by exercising the option to renew instead of negotiating new terms.?The only way to be certain you have?the?best possible?terms for your renewal is to compare those terms with current market rates in the area, a vital step often missed by healthcare professionals entering this process alone.

Myth #5: You Have No Other Options; The Landlord Has Many

This common myth might be the most important to address, because it is fundamental to how landlords operate. The landlord wants you to believe that his property is the only suitable location for your practice. The truth?is?there?are?likely?several?other?properties?that would fit the needs of your practice, and the landlord should be competing to keep you in his?building.

The landlord also wants you to believe he has several potential tenants ready to occupy your space if you don’t take it. This position is used to force a tenant to rush into signing an unfavorable lease, when, in fact, it usually takes months or years to fill a commercial space. Each leasing situation is unique, and a healthcare real estate professional who knows your strengths as a tenant can help you understand what type of leverage you have.


This information represents a few of the many misconceptions involving landlords in healthcare real estate transactions. Using a real estate professional with expertise in healthcare will help protect you from falling victim to these and other common landlord myths.

Carr Healthcare Realty is the nation?s leading provider of commercial real estate services for healthcare tenants and buyers. Every year, thousands of medical, dental, veterinary, and other healthcare practices trust Carr Healthcare Realty to help them achieve the most favorable terms on their lease and purchase negotiations. Carr Healthcare Realty?s team of experts can assist with all types of real estate transactions, including lease renewals, expansions, relocations, startup offices, purchases, and practice transitions. Healthcare practices choose Carr to save them a substantial amount of time and money; while enduring their interests are always first.