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.