You don't pay taxes on the appreciation until you sell. As long as you don't plan on doing a lot of trading, you won't pay taxes until you cash out, presumably at retirement. I guess the IRA does give you the option of exchanging between funds without having to declare a gain. However, with a regular account, if your funds have a bad year, you can cash out, take the deduction, and reinvest (after 30 days to avoid wash rules).
I don't think you answered my question.How do you avoid paying taxes on capital gains distributions and dividends that most mutual funds generate multiple times a year?
Don't confuse this will selling your mutual fund, it has nothing to do with that.
I have been holding some mutual funds for a deace now, have never sold them but I pay taxes on the distributions (1099) every year.
Can you tell me how you are getting around this?