What's the point of of a LT Capital Gain?

[Grieve]

Long term (LT) capital gain is only taxed at 15% (for now). Short term is taxed as income. If you got a long term payout, it's either because they sold some long term holdings, or a stock they hold paid out a dividend. Quite possibly special dividends before the fiscal cliff. They have to pass the cap gains onto you, it's the law. Best to avoid buying just before a distribution (you can research when they are).

I believe this is offset when you sell the fund later.