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I buy a mutual fund share of at the start of the year for 5....

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Finance

I buy a mutual fund share of at the start of the year for 5. The share splits into 2 shares in February. I earn a dividend of 0.50 on each of the split shares during the year. At the end of the year the price of each of the split mutual fund shares is 5. I do nothing else. At the end of the year I face:

a. capital gains tax on the 5 accrued gain

b. neither income tax nor capital gains tax

c. income tax on the dividend earned and capital gains tax on the 5 accrued gain

d. income tax on the dividend earned but no capital gains tax

e. capital gains tax on one of the split shares

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