Publication 564 - Mutual Fund Distributions - Internal Revenue Service

$29.70 per share. They received ex-

Mutual Fund X because those dividends do not

share). They use their Form 1099-B to complete

empt-interest dividends of $92 in 2007 and

change their basis in the shares.

columns (c) and (d). Their sales price in column

$107 in 2008.

The Martins keep this record with their mu-

(d) (the gross proceeds from Form 1099-B, box

tual fund documents, and they use it to report

2) is $3,200 ($16 per share). They enter their

4. $237 in ordinary dividends, including $220

their 2009 sale of Mutual Fund S.

gain of $1,204 in column (f).

of qualified dividends, from 100 shares of

common stock in Green Publishing Com-

Robert and Janice add the amounts in col-

pany. These were received as a cash pay-

Preparing Schedule D (Form 1040). The

umn (f) of lines 8 and 13 and enter their net

ment and not reinvested. They received

Martins use their Form 1099-B and their Mutual

long-term capital gain of $1,265 on line 15. They

Form 1099-DIV, and they report the ordi-

Fund Record to figure the gain from the sale of

also enter that amount on line 16. They check

nary dividends on Form 1040, line 9a, and

Mutual Fund S to report on Schedule D (Form

the “Yes” box for line 17, leave lines 18 and 19

the qualified dividends on Form 1040, line

1040).

9b.

blank, and check the “Yes” box for line 20. They

Robert and Janice enter the $61 capital gain

Robert and Janice bought this stock in

follow the line 20 instructions and they compute

distribution from Mutual Fund R (from Form

1995 for $10.29 per share.

their tax on Form 1040 using the Qualified Divi-

1099-DIV, box 2a) on line 13, column (f).

dends and Capital Gain Tax Worksheet in the

They report the sale of their shares in Mutual

Mutual Fund Record. Robert and Janice

Form 1040 instructions. They enter their taxable

Fund S on line 8 because they owned the shares

keep track of all their basis adjustments on their

income of $36,505 (from Form 1040, line 43) on

for more than 1 year. They use the information

Mutual Fund Record, shown later. They show

line 1 of the worksheet and their qualified divi-

from their Mutual Fund Record to complete col-

the nondividend distributions and the undistrib-

dends of $470 ($250 from Mutual Fund R and

umns (a), (b), and (e). After adjustment for their

uted capital gains from Mutual Fund S and the

nondividend distributions and their undistributed

$220 from Green Publishing Co.) (from Form

reinvested dividends from Mutual Fund R. They

capital gains, their basis is $1,996 ($9.98 per

1040, line 9b) on line 2.

do not show the exempt-interest dividends from

Table 5. Mutual Fund Record for Robert and Janice Martin

Acquired

Sold or Redeemed

Adjusted

Number

Cost

Number

Mutual Fund

Adjustment to Basis Per Share

Basis Per

Date

Per

Date

12-31-97

12-31-98

12-31-06

12-31-07

8-29-08

MUTUAL FUND S

7-12-95

200

10.00

9.98

10-5-09

200

(.05)

(.02)

(.04)

.03

.06

MUTUAL FUND X

4-19-07

87.54

29.70

MUTUAL FUND R

6-12-09

153.16

24.81

12-29-09

13.03

25.01

Include share received from reinvestment of distributions.

Cost plus or minus adjustments.

Publication 564 (2009)

Page 11

Publication 564 - Mutual Fund Distributions - Internal Revenue Service - 2009 Page 11

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