Irs Publication 564 - Mutual Fund Distributions

Table 1B. Reporting Mutual Fund Distributions on Form 1040A

IF you receive . . .

AND . . .

THEN report the distribution on . . .

your total ordinary dividends received are

Form 1040A, line 9a

$1,500 or less

● your total ordinary dividends received are

Schedule 1, line 5

ordinary dividends

more than $1,500, or

(Form 1099-DIV, box 1a)

● you received ordinary dividends as a

nominee

qualified dividends

Form 1040A, line 9b, and Qualified Dividends

(Form 1099-DIV, box 1b)

and Capital Gain Tax Worksheet, line 2

you have to file Form 1040

Form 1040; see Table 1A

you do not have to file Form 1040

Form 1040A, line 10, and Qualified Dividends

and Capital Gain Tax Worksheet, line 2

you have post-May 5 gain (box 2b)

Form 1040A, line 10b, and Qualified Dividends

capital gain distributions

and Capital Gain Tax Worksheet, lines 9 and 17

(Form 1099-DIV, boxes 2a–2f)

any Form 1099-DIV has an amount in

Form 1040; see Table 1A

box 2c, 2d, 2e, or 2f

return of capital (nontaxable) distributions

generally, not reported; see Table 1A

(Form 1099-DIV, box 3)

Form 1040A, line 8b

exempt-interest dividends (not shown on

Form 1099-DIV)

undistributed capital gains

Form 1040; see Table 1A

(Form 2439, boxes 1a–1f)

called tax-free dividends or nontaxable distribu-

earlier. See Keeping Track of Your Basis, later,

1) None of the Forms 1099 – DIV (or substi-

tions.

to determine the basis of the additional shares.

tute statements) you received have an

A return of capital distribution reduces your

amount in box 2c, 2d, 2e, or 2f.

How To Report

basis in the shares. Basis is explained under

Keeping Track of Your Basis, later. Your basis

2) You do not have to file Form 1040 for any

You must report mutual fund distributions on

cannot be reduced below zero. If your basis is

other reason. (For example, you must not

Form 1040 or Form 1040A. You cannot report

zero, you must report the return of capital distri-

have any other capital gains or any capital

mutual fund distributions on Form 1040EZ.

bution on your tax return as a capital gain. Re-

losses.)

port this capital gain on Schedule D (Form

You cannot use Form 1040A and must use

If you can use Form 1040A to report your

1040). Whether it is a long-term or short-term

Form 1040 in either of the following situations.

capital gain distributions, report any post-May 5

capital gain depends on how long you held the

•

You received a return of capital distribu-

capital gain distributions on line 10b. Use the

shares.

tion that must be reported as a capital gain

Qualified Dividends and Capital Gain Tax Work-

because it is more than your basis in your

sheet in the Form 1040A instructions to figure

Example. You bought shares in a mutual

mutual fund shares.

fund in 1999 for $12 a share. In 2000, you

your tax.

•

received a return of capital distribution of $5 a

You must report an undistributed capital

share. You reduced your basis in each share by

Form 1040. If you file Form 1040, report your

gain.

$5 to an adjusted basis of $7. In 2001, you

exempt-interest dividends on line 8b. Report

received a return of capital distribution of $1 per

your ordinary dividend distributions on line 9a

Form 1040A. If you file Form 1040A, report

share and further reduced your basis in each

and your qualified dividend distributions on line

your exempt-interest dividends on line 8b. Re-

share to $6. In 2002, you received a return of

9b. If the total of the ordinary dividends you

port your ordinary dividend distributions on line

capital distribution of $2 per share. Your basis

received is more than $1,500 or you received

9a and your qualified dividend distributions on

was reduced to $4. In 2003, the return of capital

ordinary dividends as a nominee, first report the

line 9b. If the total of the ordinary dividends you

distribution from the mutual fund was $5 a share.

ordinary dividends in Part II of Schedule B, on

received is more than $1,500 or you received

You reduce your basis in each share to zero and

line 5. Report the total from line 6 of that sched-

ordinary dividends as a nominee, first report the

report the excess ($1 per share) as a long-term

ule on line 9a of Form 1040. Attach Schedule B

ordinary dividends in Part II of Schedule 1, on

capital gain on Schedule D.

to your return.

line 5. Report the total from line 6 of that sched-

If you reported qualified dividends on line 9b,

ule on line 9a of Form 1040A. Attach Schedule 1

Reinvestment

you must figure your tax by completing either

to your return.

of Distributions

Schedule D (Form 1040) or the Qualified Divi-

If you reported qualified dividends on line 9b,

dends and Capital Gain Tax Worksheet in the

use the Qualified Dividends and Capital Gain

Most mutual funds permit shareholders to auto-

Form 1040 instructions.

Tax Worksheet in the Form 1040A instructions

matically reinvest distributions in more shares in

to figure your tax.

Do not include capital gain distributions

the fund, instead of receiving cash. You must

as dividend income on Form 1040 or

report the reinvested amounts the same way as

Do not include capital gain distributions

Schedule B.

CAUTION

you would report them if you received them in

as dividend income on Form 1040A or

cash. This means that reinvested ordinary divi-

Schedule 1.

CAUTION

Capital gain distributions. If you received

dends and capital gain distributions generally

capital gain distributions, you report them either

must be reported as income. Reinvested

Capital gain distributions. If you received

directly on Form 1040, line 13a or on Schedule

exempt-interest dividends generally are not re-

capital gain distributions, you may have to file

D, line 13, depending on your situation. Report

ported as income. Reinvested return of capital

Form 1040. But you can report capital gain distri-

distributions are reported as explained under

butions on line 10a of Form 1040A, instead of on

them on Schedule D, line 13, unless all of the

Return of Capital (Nontaxable) Distributions,

Form 1040, if both of the following are true.

following are true.

Page 4

Irs Publication 564 - Mutual Fund Distributions - 2003 Page 4

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