topic Taxes in State tax filing

Taxes

Drew100 — Fri, 05 Apr 2024 06:51:05 GMT

I still would like to know how to determine what percentage of capital gains reported by a mutual fund is from US obligations. Vanguard and Columbia could not answer that question. They give you information about the percentage of ordinary dividends that is from US obligations. The information is needed to complete my MD state taxes.

Re: Taxes

Hal_Al — Fri, 05 Apr 2024 12:33:23 GMT

Q. I still would like to know how to determine what percentage of capital gains reported by a mutual fund is from US obligations?

A. Vanguard and Columbia gives you information about the percentage of ordinary dividends that is from US obligations. That is your answer.

If you have a 1099-DIV, from a mutual fund, and a portion of the dividends are from U.S. securities; after entering your 1099-DIV, you will reach a screen: "Tell us if any of these uncommon situations apply to you". Check the box "A portion of these dividends is U.S. Government interest".

You have to manually calculate the amount, to enter, by multiplying box 1a times the percentage you got from Vanguard and Columbia.

Re: Taxes

Drew100 — Fri, 05 Apr 2024 20:02:58 GMT

Thank you for the information. One follow-up question that maybe you can help with.

Your answer addresses ordinary dividends but how do I determine what percentage of capital gains is from US obligations? The mutual companies I contacted were not able to answer this question.

Re: Taxes

Hal_Al — Fri, 05 Apr 2024 20:17:39 GMT

Q. How do I determine what percentage of capital gains is from US obligations?

A. It's none (0%).

It's only the interest from U.S. obligations that state tax exempt. What some mutual fund companies label as dividends is actually just interest.

Re: Taxes

Drew100 — Sat, 06 Apr 2024 00:48:56 GMT

Can you explain why it is 0%? If it is always 0%, why would MD tax instructions say to include only dividends attributable to interest OR capital gains from US Gvt obligations?

Re: Taxes

Hal_Al — Sat, 06 Apr 2024 00:58:28 GMT

Q. Can you explain why it is 0%?

A. In your case, it's 0 because your mutual fund company didn't provide you a number.

A more accurate general answer is "it's almost always zero''. It's rare that a mutual fund company will report that. But, investors who actually trade US bonds could see a reportable gain.

Re: Taxes

Drew100 — Sat, 06 Apr 2024 20:53:24 GMT

Thanks.

"In your case, it's 0 because your mutual fund company didn't provide you a number."

and

"A more accurate general answer is "it's almost always zero''.

I've done a ton of research online and have not come across these statements. Can you explain further?