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Tax Exempt Capital Gains

I received a form from my broker regarding tax exempt capital gains distributions shown in column 2a of 1099DIV. The form  lists the funds in their family where there could be tax exempt cap gains distributions. Is there an entry on the federal return for this or is this something that is adjusted when I do my state return?


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Level 15

Tax Exempt Capital Gains

The fund may hold Tax-exempt bonds where their Dividends are exempt...but not the Capital Gains themselves.  

Anything in box 2a on the 1099-DIV would be taxable.  

What is in box 10 of that 1099-DIV will not be Federally taxable, but will be mostly taxed by your state, (unless the bond fund owns a significant % of your own state's bonds, or perhaps if you live in a non-income taxing state).

__________________

OF course, "Never say Never".  Someone may think of an exception and post it here. 

 (like, a couple states have some partial Capital Gains exemptions, but that doesn't apply to Federal) 

View solution in original post

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Highlighted
Level 15

Tax Exempt Capital Gains

The fund may hold Tax-exempt bonds where their Dividends are exempt...but not the Capital Gains themselves.  

Anything in box 2a on the 1099-DIV would be taxable.  

What is in box 10 of that 1099-DIV will not be Federally taxable, but will be mostly taxed by your state, (unless the bond fund owns a significant % of your own state's bonds, or perhaps if you live in a non-income taxing state).

__________________

OF course, "Never say Never".  Someone may think of an exception and post it here. 

 (like, a couple states have some partial Capital Gains exemptions, but that doesn't apply to Federal) 

View solution in original post

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