1099-div

[Re40]

I received a 1099-div for last year with a large capital gain distribution however I didn’t sell any funds.  This greatly increased my adjusted income and owe taxes.  The instructions attached to statement state if capital gain distribution and no amounts in boxes 2b, 2c, 2d, and 2f that I may be able to report amount on form 1040. Can you provide more information?  Thank you!

[MaryK4 · Accepted solution]

The capital gain distributions are reported on Line 7 of your 1040.  They receive special tax rates which TurboTax calculates for you. 

A capital gain distribution is a type of dividend paid to you by a mutual fund, a regulated investment company, or a real estate investment trust.  A capital gain simply means that the fund or trust sold some assets (usually stocks and/or bonds) at a net profit.

The total of all your Box 2a amounts (i.e., all your long-term capital gains) will be reported either on Schedule D or (if there aren't any other entries on Schedule D) on Form 1040, line 13. This total flows there automatically from Schedule B. You don't have to re-enter it.

[SteamTrain · Accepted solution]

@Re40 

Mutual funds have to report the Capital Gains that occurred "inside" their fund during the year  (probably just their net after losses).  The funds usually distribute your portion of the gains to your account during December...but some also do occasional mid-year distributions.  SO, YES, you have to report any box 2a amounts, and they are taxed as long-term capital gains.

This is entirely normal behavior......and you don't have to do anything but enter the $$ in the 1099-DIV, in the various boxes, exactly as they reported them to you, and they are handled appropriately by the software

Even if you roll-over the distributions to repurchase shares, they are taxable income.

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These distributions tended to be larger than normal for everyone this year.

[Bsch4477]

Report the capital gain in box 2a and it will flow to your 1040. I assume you have no amounts in those other boxes. 

[Hal_Al]

Q. The instructions attached to statement state if capital gain distribution and no amounts in boxes 2b, 2c, 2d, and 2f that I may be able to report amount on form 1040. Can you provide more information?

A. That happens automatically in TurboTax. Instead of complicated attachment forms (8949 and Schedule D), the capital gain distribution goes directly to line 7 of form 1040. It is still taxed at long term capital gains tax rates (15% for most people but could be 0% if your income is low enough).  The tax calculation is shown on the "Qualified Dividends and Capital Gains Worksheet" (abbreviated "Qual Div/Cap Gn" on the forms list).