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How would my cost basis be applied to a disbursed basket of shares after maturity?
How would my cost basis be applied to a disbursed basket of shares after maturity?
Updated over a week ago

When you place a withdrawal request after the seven-year period, the basket of shares distributed to you will match your pro-rata ownership in the fund. This basket of disbursed shares will have a cost basis cumulatively equal to the cost basis of your original contribution. The cost basis will be reported to your Cache brokerage account.

When you receive the basket of individual stocks, there might be tax-loss harvesting opportunities. Because the basket will likely contain a mix of securities that have appreciated in value as well as those that may have depreciated, you can potentially sell some of the "losers" to offset gains from the "winners," optimizing your tax impact.

To be clear, capital gains will not be realized until you sell the shares you withdraw from the fund. Continuing to hold the stocks (or keep them in the fund past the maturity date) can extend the benefits of tax deferral.

See the potential impact of avoiding tax drag in our exchange fund simulator.

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