Non cash liquidating distributions

Box 4 lists any federal income tax withheld from dividends and distributions reported on your 1099-DIV.

Any amount listed will reduce your tax owed or increase your refund.

These are considered long-term capital gains and taxed at the long-term rates.

Box 2b reports unrecaptured Section 1250 gains from real estate or REIT transactions.

For example, if you bought 100 shares of XYZ fund at /share. The form 1099-DIV shows up in the mail with 0 in Box 3.

Instead of paying taxes on that 0 now, it goes against the initial cost of the shares.

If you’re like me, it means you spend a little more quality time with tax software each year. But do you really understand what is reported in each box of a 1099-DIV?

This is typical of mutual funds, and to a lesser degree index funds, as managers sell long-term holdings for a profit.

Reported gains from gold ETFs, like the GLD, will be found here too. You’ll see this with mutual funds, REITs, and MLPs.

This is a return of capital used to adjust your initial cost in an investment.

On the left is the payer’s information and your personal information.

It’s self-explanatory with the payer’s and your name, address, tax payer ID number, or social security number. Box 1a reports the total ordinary dividends that were paid. This includes short-term capital gains paid by mutual funds and dividends paid by money market funds. This is the portion of ordinary dividends that qualify for the lower long-term capital gains rate.

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