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

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32.6 Tax Credits From Mutual Funds

Undistributed capital gains.

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image Filing Tip
Undistributed Capital Gains From REITs
The capital gain reporting and credit rules for mutual funds (32.6) also apply if you own shares in a REIT that has retained its long-term capital gains.
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Some mutual funds retain their long-term capital gains and pay capital gains tax on those amounts. Even though not actually received by you, you include as a capital gain distribution on your return the amount of the undistributed capital gain allocated to you by the fund. If the mutual fund paid a tax on the undistributed capital gain, you are entitled to a tax credit.

Table 32-1 Reporting Mutual-Fund Distributions for 2012

Type of Distribution Shown by the Fund in How To Report
Ordinary dividends and short-term capital gain distributions. Box 1a, Form 1099-DIV Box 1a of Form 1099-DIV shows taxable ordinary dividends. The total includes ordinary dividends and short-term capital gain distributions, which are taxed as ordinary income, and also qualified dividends, if any, which are taxable at the 15% or 0% capital gain rate. The Box 1a total must be entered on Line 9a of Form 1040 or 1040A. If your total ordinary dividends from all sources exceed $1,500 or if you received as a nominee ordinary dividends on behalf of another taxpayer, you must itemize the ordinary ...

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