Business and Personal Finance Dictionary

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• CAPITAL GAIN DISTRIBUTION
  
  You receive capital gain distributions when the fund sells some of its assets and then passes along a portion to you. This distribution that you get is regarded by the IRS as a capital gain, not as ordinary dividends such as the interest you get from your bank account. It is important to separate capital gain distributions from ordinary dividends because capital gains are taxed more favorably. See also ordinary dividends.
  
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