USA Capital gains

[Frank Monte]

I just wanted clarification on my 1099-DIV Capital Gains distribution amount. Let's just use examples. I started out with $32,000 balance in my mutual fund in 2015. At the end of 2015 my Mutual Fund balance was $33,000. I automatically reinvest any dividends and gains. I received on my 2015 1099-DIV a Total Capital Gain Distribution of $13,000. If I receive a gain of $13,000 how come my Mutual Fund balance did not go up significantly!! I just cannot grasp how I had a capital gain of $13,000 and the balance only went up like $1,000. Please explain!! Thanks.

 

[maarkr]

mutual funds invest in a variety of companies... and a variety of types of stock or other options which may pay dividends. Some of the stocks in the fund may lose money causing the value to go down, but if some of the companies are doing well and paying good dividends, that is reported as a gain. More complicated than that but a very simplistic explanation.