What is the meaning of Distribution?

Each mutual fund pays out the dividends or interest it earns and the capital gains it realizes on the sale of securities in its portfolio to all existing shareholders. Unless you own the fund through a tax-deferred or tax-free account, you owe federal income tax on income' Distribution's at your regular rate. If the fund owned a security for more than a year before selling it, federal income tax on the capital gains distribution from that security is figured at your long-term capital gains rate. But if the fund owned the security for a shorter time, you owe tax at your regular rate.