The Disclosure Differences of Income-Tax-Basis vs. GAP-Basis Investment Funds

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GAP-basis and income tax basis investment funds are each associated with their own particular disclosure practices. Learn about the disclosure differences between GAP basis and income tax basis investment funds with help from a registered investment adviser in this free video clip.

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Video Transcript

Hi, I'm Benjamin Lupu, certified financial planner and registered investment adviser of Kensington AMI with dislcosure differences between GAP basis and income tax basis accounting for investment funds. GAP basis refers to generally accepted accounting principles and pertains to corporate balance sheets and corporate accounting which may be inside a mutual fund or other investment vehicles that contains public corporations. Public corporations are the ones that use GAP accounting. Income tax basis accounting is the kind of accounting you use on your 1040 or other income tax form. That type of accounting is the kind you use to report to federal authorities the IRS and state tax boards. Generally accepted accounting principles, GAP accounting, is for corporations. That's how they report public corporation taxes to you and mutual funds. Contact your tax preparer or certified public accountant for more information on tax preparation. I'm Benjamin Lupu, certified financial planner, and that's the difference between GAP accounting and income tax accounting for investment funds.


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