Q. Unless.........the ST distributions are part of the "non-qualified".....dividends?? Is that how its done?
A. Yes.
Box 2a of the 1099-Div shows only your long term capital gain distributions (LTCGD). Short term capital gain distributions (STCGD) are included in box 1a with ordinary dividends. STCGD are not shown separately on the 1099-Div. They may be shown on supplemental paper work by the mutual fund company, but that's not relevant. LTCGD are taxed the same as actual Long term gains from the sale of stocks, mutual fuds and other securities.. LTCGD are reported on line 13 of Schedule D (note: they're call capital gain distributions, not long term capital gain distributions; but that's what they are).
STCGD are not treated as short term capital gains on the tax return. They're taxed as ordinary dividends (not qualified dividends).
"My understanding is I can report these capital gain distributions on my schedule B".
No. Capital gains distributions (they're long term) are reported directly on Sch D (line 13). Ordinary dividends from box 1a (including any STCGD) are reported directly on Sch B; but as dividends, not STCG.
"Yes, I know it flows to my schedule D". No, nothing on schedule B flows to Sch D.
