When mutual funds distribute net short-term capital gains these are reported as ordinary dividends. They will be reported in Box 1a of the Form 1099-DIV that the mutual fund company will provide after the close of the year.
You should wait until you have the 1099-DIV from the mutual fund company and then enter the data as it appears on that form into the corresponding boxes in the TurboTax program in the area for dividend income/Form 1099-DIV.
If you are trying to recreate a lost form for a prior year return (which may be available upon request to the fund company) or estimate numbers while you are awaiting forms, enter these in TurboTax Business in Box 1a (Total ordinary dividends) in the entry area for Form 1099-DIV. Reporting it this way ensures it will match up with what the IRS has in their records.
On Form 1041, this number will transfer to Line 2a..
You will see here (1099-DIV filing instructions) that this is where the IRS instructs that net short-term capital gains from mutual funds should be reported for proper handling on the tax return.
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