J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

32.3 Mutual-Fund Distributions Reported on Form 1099-DIV

Mutual-fund distributions are reported to you and the IRS by the fund on Form 1099-DIV or substitute statement. Distributions that you reinvested to acquire additional shares are reported and taxed in the same way as distributions that are actually paid out to you.

Types of distributions.

The Form 1099-DIV (or substitute statement) from your fund for 2012 may show several kinds of distributions. Distributions that you reinvested (32.2) instead of receiving in cash are included on the Form 1099-DIV.

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Filing Tip

Reduced Rate for 2012 Qualified Dividends

Box 1b of Form 1099-DIV for 2012 shows your qualified dividends, the portion of the amount in Box 1a (total ordinary dividends) that is eligible for the 15% or 0% capital gain rate. These favorable rates will apply for 2013 dividends only if the 2012 rules are extended by Congress; see the e-Supplement at jklasser.com for an update.

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• Ordinary dividends—are the most common type of dividend, payable out of the fund’s earnings and profits. They are shown in Box 1a of Form 1099-DIV. Short-term capital gain distributions are reported as ordinary dividends.
• Qualified dividends—shown in Box 1b, are your share of the ordinary dividends (Box 1a) that are qualified dividends (4.2) from the fund’s investments in U.S. corporations and qualified ...