1099's - Mutual Fund Short Term Capital Gains

[Amethyst]

Looking at our end-of-year data, several of our MF's had short-term CG distributions.

But looking at the 1099's on these same MF's, "Capital Gains Distributions" are listed as a single line item.

Since LTG and STG are taxed very differently, how is our CPA (who just gets the 1099's) expected to know which is which?

Thanks, Amethyst

 

[scrabbler1]

Short-term cap gain distributions are reported as ordinary dividends and will be included as part of box 1a on the 1099 form.

 

[pb4uski]

My faint recollection is that short-term capital gain distributions are combined with income dividends in boxes 1a and box 1b... qualified dividends... would exclude short-term capital gain distributions... so short-term capital gain distributions effectively end up in non-qualified dividends and are taxed at ordinary tax rates and box 2a is only long-term capital gain distributions.

 

[Amethyst]

Thanks, I think I understand now. STG and "non-qualified divs" are treated the same for tax purposes, so no need to break them out on the 1099.

 

[pb4uski]

You got it.

 

[Amethyst]

One question: Do the MF companies also include the "interest-like" dividends, such as from money market mutual funds, in the "total dividends" box? So STG's and MoneyMarket divs are all mixed up in there?

 

[Amethyst]

Just to clarify: I'm trying to use an on-line tax calculator, which asks for STG's, LTGs, taxable interest, dividends, and qualified dividends. I did an initial calculation at year's end, and now am trying to use my 1099's. Hence the confusion grrrr.

 

[pb4uski]

One question: Do the MF companies also include the "interest-like" dividends, such as from money market mutual funds, in the "total dividends" box? So STG's and MoneyMarket divs are all mixed up in there?

I think so... like dividends from a bond fund would be included in total dividends (box 1a), but not included in qualified dividends (box 1b) so tey end up as non-qualified dividends and subject to ordinary rates.