Senate plan lets mutual funds skip a tax change in which hurts individual investors

Following a backlash, the Senate Finance Committee has decided a proposal to prevent investors via minimizing taxes will no longer apply to mutual funds, as first proposed — however in which will still hit individuals, the Wall Street Journal reported Saturday.

The provision inside U.S. Senate plan will alter tax rules on some securities sales by barring investors via choosing which stock shares they want to unload when selling part of an equity position, the Journal reported. Instead, investors will have to sell off their oldest shares first, the report said.

The change was originally meant to apply to both fund firms in addition to individuals. However, senators exempted mutual funds via the provision after protests by some of the largest firms, including Vanguard Group in addition to Eaton Vance, according to the Journal.

Advisors are urging investors who intend to donate or put for sale specific shares in which are not their oldest to do so before the end of the year, the Journal said.

For more about the Senate’s proposed tax provision, see the report inside Wall Street Journal.

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