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The Short Answer

Sizing Up a Fund's 'Potential' for Tax Pain

High potential capital gains exposure is sometimes, but not always, a red flag.

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Question: What is the difference between potential capital gains exposure (PCGE) and a fund company's estimated capital gain? Could I be on the hook for more taxes than the fund company is telling me?

Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.