Instructions For Form 1099-Div - 2015 (Page 2 of 4) in pdf

Section 404(k) Dividends

instructions for box 1b, later. When determining the number

of days the recipient held the stock, you cannot count certain

Report as ordinary dividends in box 1a of Form 1099-DIV

days during which the recipient's risk of loss was diminished.

payments of 404(k) dividends directly from the corporation to

The ex-dividend date is the first date following the declaration

the plan participants or their beneficiaries.

of a dividend on which the purchaser of a stock is not entitled

Section 404(k) dividends are not subject to backup

to receive the next dividend payment. When counting the

withholding. Also, these dividends are not eligible for the

number of days the recipient held the stock, include the day

reduced capital gains rates (see Exceptions under Qualified

the recipient disposed of the stock but not the day the

Dividends, earlier).

recipient acquired it.

Dividends attributable to periods totaling more than 366

RICs and REITs

days that the recipient received on any share of preferred

stock held for less than 91 days during the 181-day period

Qualified dividends. If any part of the total ordinary

that began 90 days before the ex-dividend date. See the

dividends reported in box 1a is qualified dividends, report the

instructions for box 1b, later. When determining the number

qualified dividends in box 1b.

of days the recipient held the stock, you cannot count certain

For guidance pertaining to dividends designated by

days during which the recipient's risk of loss was diminished.

RICs and REITs, see Notice 2004-39, 2004-22

Preferred dividends attributable to periods totaling less than

TIP

I.R.B. 982, (capital gain dividends of RICs and

367 days are subject to the 61-day holding period rule above.

REITs) available at

Dividends that relate to payments that the recipient is

and Rev. Rul. 2005-31, 2005-21 I.R.B. 1084, (limitations

obligated to make with respect to short sales or positions in

applicable to dividends received from RICs) available at

substantially similar or related property.

Dividends paid by a regulated investment company that

are not treated as qualified dividend income under section

Dividend payment delayed until January. If a regulated

854.

investment company (RIC) or a real estate investment trust

Dividends paid by a real estate investment trust that are

(REIT) declares a dividend in October, November, or

not treated as qualified dividend income under section

December payable to shareholders of record on a specified

857(c).

date in such a month, the dividends are treated as paid by

Deductible dividends paid on employer securities. See

the RIC or REIT and received by the recipients on December

Section 404(k) Dividends, on this page.

31 of such year as long as the dividends are actually paid by

Qualified foreign corporation. A foreign corporation is a

the RIC or REIT during January of the following year. Report

qualified foreign corporation if it is:

the dividends on Form 1099-DIV for the year preceding the

1. Incorporated in a possession of the United States or

January they are actually paid. See sections 852(b)(7) and

857(b)(9) for RICs and REITs, respectively.

2. Eligible for benefits of a comprehensive income tax

treaty with the United States that the Treasury Department

If a dividend paid in January is subject to backup

determines is satisfactory for this purpose and that includes

withholding, withhold when the dividend is actually paid.

an exchange of information program.

Therefore, backup withhold in January, deposit the

withholding when appropriate, and reflect it on Form 945,

For a list of income tax treaties of the United States

Annual Return of Withheld Federal Income Tax, for the year

that (a) are comprehensive, (b) include an

TIP

withheld. However, since the dividend is reportable on Form

information exchange program, and (c) have been

1099-DIV for the prior year, the related backup withholding is

determined by the Treasury Department to be satisfactory for

also reportable on the prior year Form 1099-DIV.

this purpose, see Notice 2011-64, 2011-37 I.R.B. 231,

Qualified small business stock—RICs. Under section

available at

1202, a 50% exclusion may be allowed on the gain from the

If the foreign corporation does not meet either 1 or 2

sale or exchange of qualified small business stock issued

above, then it may be treated as a qualified foreign

after August 10, 1993, and held for more than 5 years. A 60%

corporation for any dividend paid by the corporation if the

exclusion may be allowed if the stock is empowerment zone

stock associated with the dividend paid is readily tradable on

business stock acquired after December 21, 2000. For

an established securities market in the United States. See

qualified small business stock acquired after February 17,

Notice 2003-71, 2003-43 I.R.B. 922, available at

2009, and before September 28, 2010, the exclusion is 75%.

, for more information

For qualified small business stock acquired after September

on when a stock may be considered to be readily tradable.

27, 2010, and before January 1, 2014, the exclusion is 100%.

For additional requirements that must be met, see Notice

For purposes of the 75% and 100% exclusions, the

2006-3, 2006-3 I.R.B. 306, available at

acquisition date shall be the first day on which the stock was

2006-03_IRB/ar11.html.

held by the taxpayer determined after the application of

section 1223. The 75% and 100% exclusion increases do not

For guidance on the extent to which distributions,

apply to empowerment zone stock.

inclusions, and other amounts received by, or

TIP

included in the income of, individual shareholders as

If any part of the capital gain distribution reported in

ordinary income from foreign corporations subject to certain

box 2a may qualify for this exclusion (taking into

anti-deferral regimes may be treated as qualified dividends,

consideration the recipient's holding period), report the gain

see Notice 2004-70, 2004-44 I.R.B. 724, available at

in box 2c, and furnish the recipient a statement that reports

2004-44_IRB/ar09.html.

separately for each designated section 1202 gain the:

Name of the corporation that issued the stock that was

sold,

Date(s) on which the RIC acquired the stock,

Date sold,

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Instructions for Form 1099-DIV (2015)

Instructions For Form 1099-Div - 2015 Page 2

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