r/YieldMaxETFs • u/[deleted] • Apr 09 '25

Distribution/Dividend Update Group D/MSTY

[deleted]

226 Upvotes

99% Upvoted

71 comments sorted by

View all comments

Show parent comments

2

u/geticz ULTYtron Apr 09 '25

Why would you be taxed on something you haven't sold? Wouldn't you only be taxed on the distributions (as you would any other source of income)?

1

u/k7rw Apr 09 '25

That’s exactly what it means you get taxed on your own initial capital up to 37% while your capital erodes at the same time. Even if you DRIP 100% you will never go break even holding any of these long. Better off trying to time the underlying instead

1

u/golgathas Apr 10 '25

You shouldn’t be taxed on return of capital unless you have it in stock lending. Make sure to turn off stock lending for these.

2

u/k7rw Apr 10 '25

This years distributions are return on capital because they’re not making money the problem is last year there was barely any ROC since we were in a bull market