Search Results for: mutual fund distributions

Nondividend Distributions

Mutual funds sometimes make distributions that don’t represent earnings. When you receive this type of distribution, you’re considered to be getting back some of the money you invested in the company. That’s why these payments are sometimes called return of capital distributions. The IRS used to call them nontaxable distributions but now calls them nondividend

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Exempt Interest Distributions

Some mutual funds are established to provide a way to invest in municipal bonds and other securities that produce tax-exempt interest. These investments are typically found in taxable accounts of high-income taxpayers. Distributions from these mutual funds are usually composed mainly of tax-exempt interest. Under the special tax rules for mutual funds, you should treat

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Capital Gain Distributions

If a mutual fund has long-term capital gains, it can designate part of its dividend as a capital gain distribution. The shareholders report this part of the dividend as if it were their own long-term capital gain. These amounts are called capital gain distributions or capital gain dividends. This treatment applies only to long-term capital

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Mutual Fund Ordinary Dividends

As the term is used in income tax reporting, ordinary dividends include all taxable distributions that aren’t treated as long-term capital gain. That means the number appearing in the box with this label on Form 1099-DIV can include some items that are not exactly ordinary. Qualified dividends Ever since 2003, some or all of your

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Mutual Fund Tax Guide

Within a retirement account or other tax-favored investment vehicle, such as a 529 plan, mutual funds generally produce no special tax results. It’s a different story if you own mutual fund shares in a normal, taxable account. In this case, you may encounter a number of special rules that apply to dividends and other distributions.

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Conversion Consequences

Conversion of a Roth IRA is in some respects similar to a rollover. Unlike rollovers, however, a conversion from a traditional IRA to a Roth IRA is taxable. Amount taxable If all of your contributions to all of your traditional IRAs have been deductible, then the full amount of your rollover is taxable. Q: Can

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