How are investments in hedge/mutual funds or CTAs usually taxed?

[pgo1970]

Say I put some money into a hedge fund, mutual fund or CTA.

Is my money growing tax free in the fund and I only pay my capital gains tax when I take the money out?

Or does the fund internally pay some tax when it sells for profit on my behalf?

 

[Swan Noir]

There is no double taxation if the entity -- the fund, etc. -- is properly set up.

Quote from pgo1970:

Say I put some money into a hedge fund, mutual fund or CTA.

Is my money growing tax free in the fund and I only pay my capital gains tax when I take the money out?

Or does the fund internally pay some tax when it sells for profit on my behalf?

 

[newwurldmn]

If you are a US investor you pay taxes in the shape the gain is realized.

So your money doesn't grow tax free. Just like in a mutual fund.