@Xarax --
I think you are mixing up two different things.
A capital gain (or loss) occurs when you sell your mutual fund shares. These sales are reported on a 1099-B.
A capital gain distribution occurs when the mutual fund sells its own shares of stocks or other investments internally, within its own portfolio. If the mutual fund has capital gains from these transactions, they are passed on to the mutual fund's shareholders in what's called a capital gain distribution. Capital gain distributions are reported on a 1099-DIV.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
