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Why is there a capital gains calculation and tax fee if I did not sell any stocks?"

I didn't sell any stocks so there were no capital gains last year. Why am I being taxed on capital gains as well as regular dividends?
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2 Replies
AnnetteB6
Expert Alumni

Why is there a capital gains calculation and tax fee if I did not sell any stocks?"

Even if you did not sell any stocks, if you reported qualified dividends as part of your return, then the Qualified Dividend and Capital Gain Tax Worksheet is used to calculate your total tax for your return.  The qualified dividends are taxed as long term capital gains at a lower rate than your ordinary income.

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Hal_Al
Level 15

Why is there a capital gains calculation and tax fee if I did not sell any stocks?"

In addition to qualified dividends in box 1b of form 1099-DIV, you may also have "Capital Gains Distributions"  in box  2a of form 1099-DIV. 

For tax purposes, Capital gains distributions are reported as long term capital gains on line 13 of Schedule D and line 7 of form 1040.  That requires an upgrade in TurboTax. 

 

It's not clear if @AnnetteB6  is saying that Qualified Dividends, alone, requires an upgrade (and I'm not sure).

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