What are the tax implications of investing with Virtus?

Investing with Virtus Investment Partners can entail various tax implications, and it is essential for investors to consider these aspects when they create their investment strategies. Virtus offers a wide range of investment products including mutual funds, exchange-traded funds, and separately managed accounts, each of which may have different tax consequences based on the type of investment vehicle chosen. One of the primary tax implications arises from capital gains distributions. When a mutual fund generates gains from selling securities within its portfolio, those gains are typically passed on to shareholders, creating a taxable event. Investors are generally responsible for reporting these distributions on their tax returns even if the income is reinvested. This can result in a tax liability despite no cash being withdrawn from the investment. Another consideration is the taxation of dividends. Virtus investment funds may pay dividends that are classified as either qualified or non-qualified. Qualified dividends are usually taxed at the long-term capital gains rate, which is lower than the ordinary income tax rate applied to non-qualified dividends. Therefore, the type of income generated by the investment can significantly affect an investor's tax burden. Additionally, the timing of buying and selling investments within a Virtus product can affect the amount of taxes an investor owes. Short-term capital gains, arising from securities held for less than one year, are generally taxed at higher ordinary income rates, while long-term capital gains benefit from reduced tax rates. Lastly, it is crucial to consider that tax regulations can frequently change, and they may differ based on individual circumstances, including income level and tax filing status. For personalized advice tailored to specific situations, it is advisable for investors to consult with a tax professional or financial advisor. Investors can also visit the Virtus website for more detailed information about their investment offerings and any related tax implications.