Legislation introduced in the U.S. House in June that would lower the capital gains taxes investors involuntarily incur as a result of the distributions made within fund portfolios, has received varying reviews from representatives and executives of the mutual fund and annuity industries. The advantages the measure would give the mutual fund industry could drive a wedge between it and the annuities industry.

The bill would offer investors exemptions on taxes of up to $3,000 in reinvested capital gains distributions each year. Any gains would still be subject to capital gains taxes when the funds' shares are redeemed.

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