Calculating US Government Interest from brokerage 1099 that combines multiple funds?

[hiroo]

I have a fund in a brokerage account so the 1099-DIV combines all the funds in the account. So it has 1a "ordinary dividends" and 1b "qualified dividends" for all funds combined. 

In a later detail section, it provides the breakdown for specific funds in categories like: long-term cap gain, nonqualified dividend, qualified dividend, short-term cap gain, foreign tax withheld.  Another section gives the US Gov percentage for each fund.

I know I should multiply the 1a "ordinary dividends" by the gov percentage, but the combined brokerage 1099 does not break out a specific 1a "ordinary dividends" for each fund, and I am not clear on how to calculate the ordinary dividends from the nonqualified and qualified dividend numbers.  I've never been clear if the nonqualified dividends number already includes the qualified or if they are completely separate, and how the term "ordinary dividends" differs from either of those two?

Can somebody clarify how the various types of dividends interact?

And what number should I be multiplying by the gov percentage to get the gov dividend amount?  

[NCperson]

for federal tax purposes, you are to post the 1099-div form EXACTLY as received - (those percentages are for use on state forms only - and only if the state you are in doesn't have  a minimum percentage).  There is no interpretation  necessary as you are describing below . Failure to copy the data from a form exactly as its presented into TT will invalidate TT's accuracy guarantee

[hiroo]

Not a helpful answer and completely misses the point of the question.  Nothing I said indicates I am changing anything from the 1099-DIV.

There is a section in TurboTax exactly for this, I believe it is a checkbox that says something like "A portion of these dividends are US Government interest." and, if checked, you are to enter the portion that is US Gov related.  So, what I am looking for is help in how to calculate this number for the specific fund(s) that have a portion that is US Gov related.  If these funds were all held in individual accounts, there would be no problem.  However, because multiple funds are held together in a brokerage account, then I have to use the detail breakdown also provided on the brokerage 1099 to break out the relevant dividend portions.  And that is where the confusion comes in, because they use different terminology from the main 1099-DIV: instead of "ordinary dividends", they provide numbers for "qualified dividends" and "non-qualified dividends."  I just need to understand how ordinary relates to qual and nonqual in this case.

[NCperson]

Qualified are dividends on stocks and mutual funds/ ETFs that have stocks as their underlying asset

Everything else is non-qualified (interest on bonds and related bond ETFs and mutual funds)

Ordinary = non qual + qualified

The calculation may affect your state taxes - what state are you in?

[hiroo]

Thanks for the helpful reply.

Since the brokerage document provides nonqual and qual numbers for the individual fund, along with the % of US Gov income, then I would just add the nonqual and qual dividends, to get the ordinary dividends, then multiply that with the % of US Gov income to get the amount of dividend income derived for US Gov securities.  Correct?

I am in California.  My understanding is that the entire purpose of this exercise is to exclude it from state taxable income.

[NCperson]

see middle of page 3 of attached

Broadly the approach works but you would need to understand the asset composition of the funds ... do the multiplication before you add the qualifying and non-qualifying together

I can’t imagine any qualifying dividends are excluded from CA tax because dividends are not interest.

https://www.ftb.ca.gov/forms/2013/13_1001.pdf

[hiroo]

Here is one example of what the statement shows in terms of the breakdown and the gov percentage.  Does this give enough to answer that question about US gov income? 

The doc you linked indicates that the Fed Home Loan portion can't be excluded.  So mainly I could use the 4.24% of US Treasury?  (what about the 0.01% Fed Farm Credit?)  and which category should I apply that percentage to?

[NCperson]

Look at the “exempt interest” bullet (page 3) and the 50% rule... unless the US and CA pieces exceed 50% , then everything is taxable within a mutual fund

So you are looking at the right level of detail but don’t have 50%

[hiroo]

ok thank you for pointing that out.