3

I own shares of the Vanguard New York Long-Term Tax-Exempt Fund (Admiral Shares)(VNYUX).

I'm wondering exactly what is tax-free about it. The link says that the "interest income" is tax-free (reading carefully, it says that at least 80% of it will be tax-free, but in practice it has been close to 100%). I assume this is what I see as dividends for the fund in my statements and transaction history on the website.

But how about capital gains? In addition to the dividends/interest income, the share price fluctuates. If I sell or exchange shares, will I have to pay capital gains (or take a capital loss)?

Chris W. Rea
  • 31,999
  • 17
  • 103
  • 191
Jer
  • 2,974
  • 6
  • 29
  • 37

1 Answers1

5

Yes, even though interest might be tax free, a capital gain or loss on sale of the fund is taxable.

JoeTaxpayer
  • 172,694
  • 34
  • 299
  • 561