TAX FORMS INVOLVED
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Our discussion of mutual fund taxes would not be complete without
a look at the tax forms you will need when you report your income to the
government. Each of the forms described below will be sent to you (and to the
? Form 1099-DIV will be sent
to you in January. It will show you how much ordinary dividend income you earned
in the previous year. It will also show you your short-term and long-term
capital gains dividends, along with any return of capital you received.
? Form 1099-B reports sales of
mutual fund shares. It reports the gross proceeds of the sales.
? Form 1099-R shows you any
withdrawals made from retirement plans.
Information on taxable income must be transferred to your federal
income tax return. You will record your dividend income on Schedule B, and
capital gains and losses on Schedule D.
We close with a note on the importance of learning about
how your mutual funds are taxed.