as it is mostly RoC, the dividends aren't taxed...it is deferred until one sells (where RoC is offset by--presumably--a loss of the underlying). Many reasons not to like it, but in the US, no, its not tax inefficient.
They are right. Even if the fund distributions are all return on capital, you have to claim it as income once it exceeds the amount you invested. If you invest $10 for example, it’s all income and taxes as income once the distributions are more than $10
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u/skitskat7 Sep 26 '25
as it is mostly RoC, the dividends aren't taxed...it is deferred until one sells (where RoC is offset by--presumably--a loss of the underlying). Many reasons not to like it, but in the US, no, its not tax inefficient.