Instructions For Form 1099-Div - 2016 (Page 2 of 4) in pdf

Dividends that relate to payments that the recipient is

2015-24_IRB/ar07.html, and Rev. Rul. 2005-31, 2005-21

I.R.B. 1084, (limitations applicable to dividends received from

obligated to make with respect to short sales or positions in

RICs) available at

substantially similar or related property.

Dividends paid by a regulated investment company that

Dividend payment delayed until January. If a regulated

are not treated as qualified dividend income under section

investment company (RIC) or a real estate investment trust

854.

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

Dividends paid by a real estate investment trust that are

December payable to shareholders of record on a specified

not treated as qualified dividend income under section

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

857(c).

the RIC or REIT and received by the recipients on December

Deductible dividends paid on employer securities. See

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

Section 404(k) Dividends on this page.

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

Qualified foreign corporation. A foreign corporation is a

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

qualified foreign corporation if it is:

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

1. Incorporated in a possession of the United States, or

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

2. Eligible for benefits of a comprehensive income tax

If a dividend paid in January is subject to backup

treaty with the United States that the Treasury Department

withholding, withhold when the dividend is actually paid.

determines is satisfactory for this purpose and that includes

Therefore, backup withhold in January, deposit the

an exchange of information program.

withholding when appropriate, and reflect it on Form 945,

Annual Return of Withheld Federal Income Tax, for the year

For a list of income tax treaties of the United States

withheld. However, since the dividend is reportable on Form

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

TIP

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

information exchange program, and (c) have been

also reportable on the prior year Form 1099-DIV.

determined by the Treasury Department to be satisfactory for

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

sale or exchange of qualified small business stock issued

If the foreign corporation does not meet either (1) or (2)

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

above, then it may be treated as a qualified foreign

exclusion may be allowed if the stock is empowerment zone

corporation for any dividend paid by the corporation if the

business stock acquired after December 21, 2000. For

stock associated with the dividend paid is readily tradable on

qualified small business stock acquired after February 17,

an established securities market in the United States. See

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

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

For qualified small business stock acquired after September

, for more information

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

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

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

For additional requirements that must be met, see Notice

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

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

held by the taxpayer determined after the application of

2006-03_IRB/ar11.html.

section 1223.

For guidance on the extent to which distributions,

If any part of the capital gain distribution reported in

inclusions, and other amounts received by, or

box 2a may qualify for this exclusion (taking into

TIP

included in the income of, individual shareholders as

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

ordinary income from foreign corporations subject to certain

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

anti-deferral regimes may be treated as qualified dividends,

separately for each designated section 1202 gain the:

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

Name of the corporation that issued the stock that was

2004-44_IRB/ar09.html.

sold,

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

Section 404(k) Dividends

Date sold,

Recipient's part of the sales price,

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

Recipient's part of the RIC's basis in the stock, and

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

the plan participants or their beneficiaries.

Amount of the recipient's section 1202 gain and the

exclusion percentage.

Section 404(k) dividends are not subject to backup

Qualified tax credit bonds. If a RIC or REIT holds any

withholding. Also, these dividends are not eligible for the

qualified tax credit bonds, any interest that the RIC or REIT

reduced capital gains rates (see Exceptions under Qualified

recognizes on the bonds is included in the RIC's or REIT's

Dividends, earlier).

gross income. See section 54A and Notice 2009-15, 2009-6

RICs and REITs

I.R.B. 449, available at

2009-06_IRB/

ar09.html. RICs can make an election to distribute any

Qualified dividends. If any part of the total ordinary

credits allowed to shareholders or beneficiaries. Report tax

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

credit bond credits distributed by a RIC or REIT on Form

qualified dividends in box 1b.

1097-BTC. See section 853A.

For guidance pertaining to dividends of RICs and

If a RIC or REIT distributes any credits with respect to its

REITs, see Notice 2004-39, 2004-22 I.R.B. 982,

stock, the RIC or REIT must report the distributed credits that

TIP

(capital gain dividends of RICs and REITs) available

are treated as dividends on Form 1099-DIV. See Notice

at 2004-22_IRB/ar11.html, modified by

2010-28, available at 2010-15/ar08.html.

Notice 2015-41, 2015-24 I.R.B. 1058, (capital gain

distributions of RICs) available at

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Instructions for Form 1099-DIV (2016)

Instructions For Form 1099-Div - 2016 Page 2

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