On my 1099-DIV, reinvested dividends appear in box 2a as a capital gain. Since they are not taxable income, where should they be reported ?

[Rachel_W · Accepted solution]

You should input your Form 1099-DIV form into TurboTax exactly how it appears.  

Total Capital Gains Distributions from 1099-DIV Box 2a are included as taxable income even though they are reinvested.  They add to the cost basis of your mutual fund and will come in to play when you sell your shares.

For example, say you purchased 200 shares of Mutual Fund A for $2,000 in 2015.  You had taxable dividends/capital gains distributions of $100 in 2015, $200 in 2016 and $250 in 2017.  Your cost basis in the mutual fund shares is your purchase price of $2,000 plus all your reinvested dividends & capital gains distributions of $550 = $2,550. Let's say you sold all of your shares in 2017 for $3,000.  Your gain on the sale would be $450 ($3,000 sales price - $2,550 cost basis).

[TaxLost]

In the Income/Interest and Dividends/Dividend section in turbotax I imported a 1099-Div form.  Part of the information on the form is line 2a "Total capital gain distribution" which is listed on the page which says, "Here's the dividend info we have so far."   However, it is not listed on the "Your income summary" page.

My question is, "Do I need to enter this information again in the "Investment Income" section?

Thanks.

[SteamTrain]

@TaxLost 

The Your Income Summary page, for 1099-DIV forms, only shows the values of boxes 1a and 11 added together.

The box 2a,b,c,d values go elsewhere, and do not hit that summary

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The box 2a,b,c,d values are automatically transferred to the appropriate places.  The 2a values go directly to  line 13 of the Schedule D....haven't checked the others