What Does Phantom Gain Mean?

Question Posted / bjanmejai

2 Answers
6950 Views
CompuCom, Ernst Young, I also Faced
E-Mail Answers

Answers were Sorted based on User's Feedback

What Does Phantom Gain Mean?..

Answer / bjanmejai

when a gain on an investment is offset
by a loss in the same investment, which
usually comes from an income tax provision.
Phantom gains are named as such because
there is no actual return, although it
may initially seem otherwise.

Is This Answer Correct ?

10 Yes

0 No

What Does Phantom Gain Mean?..

Answer / jaishree

Phantom gains are capital gains on which you owe tax even if your actual return on the investment is negative.

For instance, if a mutual fund sells stock that has increased in price, you, as a fund shareholder, are liable for taxes on the portion of the gain the fund distributes to you.

The rule applies even if you bought shares of the fund after the stock price increased, and didn't benefit from the stock's rising value. You also owe the tax if you purchase shares in the fund after the stock has been sold but before the fund has made its distribution.

Phantom gains can also occur in a falling market, when a mutual fund may sell investments to raise cash to repurchase shares from shareholders who are leaving the fund.

If you're still an owner of the fund at the time any gains from those sales are distributed, you'll owe tax even though the value of your investment has decreased.

Is This Answer Correct ?

3 Yes

0 No

Post New Answer

More Accounting General Interview Questions

how will be the entry of outstanding salaries in receipt & payment account, income & expenditure & balance sheet

1 Answers

Any income which is earned in the financial year(2009-10) but received in the assessment year(2010-11) wil be taxable or not?

3 Answers

What are the expenses comes uner direct exp

5 Answers

WHAT IS THE DIFFRANCE B/W THE PREFERENCE SHARES AND EQUITY SHARES....