Asked by J
What is the federal tax treatment of capital gain distributions reported on Form 1099-DIV, Dividends and Distributions?
Capital gain distributions are:
Always tax-exempt.
Taxed as ordinary income.
Treated as long-term capital gains.
Treated as short-term capital gains.
All Answers 1
Answered by
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AI
Treated as long-term capital gains.
Explanation: Capital gain distributions (reported on Form 1099‑DIV, box 2a) represent the fund’s net long‑term gains and are taxed at long‑term capital gains rates (0/15/20, etc.), regardless of how long you personally held the fund shares.
Explanation: Capital gain distributions (reported on Form 1099‑DIV, box 2a) represent the fund’s net long‑term gains and are taxed at long‑term capital gains rates (0/15/20, etc.), regardless of how long you personally held the fund shares.
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