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Rebalance
Dividends and Tax
Hi guys, I am considering of just maintaining just 1 ETF instead of having 3. I only held those ETFs for less than 12 months so if I rebalance, would I be taxed more? TIA
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Ralph Raymond Liguid
Asked on 12 July 2024
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Hi Ralph.
If you sell those ETFs and they had capital gains, you’d have to pay tax on those gains. Yet if you held them longer than 12 months, you will generally only need to pay tax on 50% of the capital gain.
So yes, you’ll be taxed more than if you wait. However, it’s also worth thinking about the performance of those funds. If you believe they may perform worse than your single ETF, then it may not be worth keeping them for the extra time (depending on how long it is).
Hope that helps.
Dave
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