Don't celebrate your big market gains just yet – a tax bill is waiting for you.
Generally, mutual funds distribute capital gains to their investors near the end of each year. You can expect to see notifications from your fund companies now, and receive the gains in mid to late December.
These distributions are considered long-term capital gains, and generally are subject to a rate of 15 percent, depending on your income.
Expect to receive a Form 1099-DIV early next year with the details of your distribution. You'll need this when you file your taxes in the spring.
So far, 2017 is looking like a bumper year for the market. Consider that the S&P 500 index is up about 15 percent year-to-date. Even international stocks are enjoying a boom: The IShares MSCI Emerging Markets ETF has a year-to-date return of 31.6 percent as of November 14.
The topic has been front and center for financial advisors, who are finding ways to help clients save on tax bills from large mutual fund distributions.