ETF vs Mutual Funds

[sunpak]

ETFs create and redeem shares with in-kind transactions that are not considered sales.
Can someone please explain this statement? Let’s say you buy USO (Etf on Crude Oil) at 20 and sell it at 30, you wont be taxed on the $10 you made in the ETF?
Thanks,

 

[MBStrader]

You as an individual will pay taxes on your gain. The ETF itself does not distribute capital gains at year end that are taxed like some mutual funds do. Mutual funds are required to pay out a certain percentage of their gains each year which causes a tax liability for the investor even if you didn’t sell your holdings.

 

[Chuckrox8]

MBStrader wrote:
You as an individual will pay taxes on your gain. The ETF itself does not distribute capital gains at year end that are taxed like some mutual funds do. Mutual funds are required to pay out a certain percentage of their gains each year which causes a tax liability for the investor even if you didn’t sell your holdings.

That’s not completely true. Our firm manages ETFs and MFs and our ETFs distribute capital gains from time to time.
I don’t work for iShares, but here is a list of their ETFs that had cap gains distributions in 2014: http://www.ishares.com/us/capital-gains-distributions