I have had a mutual fund since about 1991, and it has steadily grown in value over the years. The dividends earned are rolled back into the fund and used to buy additional shares. Small capital gains were earned in the 1990's and 2000's, and none in 2012. Since then the capital gains have been earned in varying amounts each year. This is my first year filing AZ state taxes, and it is asking for gain or loss from assets acquired after December 31, 2011. How do I make this determination? Is it the same value as reported on my 2024 1099-DIV?
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The 1099-DIV that you received likely shows all capital gains distributions, but for this question you should only include gains from shares purchased after December 31, 2011. Arizona allows you to reduce your capital gains from assets purchased after 2011 by 25%. So, if you use the amount from the 1099-DIV you'll likely overstate your income. You'll need to determine which shares, if any, were purchased after 2011 from dividend reinvestment.
If none of the dividend reinvestment occurred after 2011, you wouldn't need to adjust any of the capital gain income on the AZ return. If there was dividend reinvestment, you'll need to check your statements or contact your investment company for records showing which shares were purchased through dividend reinvestment after 2011 and then recalculate your gain using only those shares. If your investment company offers cost-basis tracking, they may have this information available for you broken down by purchase date.
If the investment company doesn't have this data and you can't reasonably reconstruct it, you won't be able to make this adjustment.
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