Some qualified dividends are from securities that didn't meet the required holding period

[Mitzy20]

In order to answer this question, do I need to check whether there is a 1099-B short term sale transaction for any given qualified dividend received? If so, that means I would need to cross-reference every qualified dividend received with ta matching1099-B short term sales transaction for the issuing company.
Is this what the question is asking?

[JamesG1]

I think not.  The issuer of the IRS form 1099-DIV is charged with determining whether the transaction reported meets the requirements of a qualified dividend.

Are you referring to dividends that have not been reported on an IRS form 1099-DIV?  Or do you have information about a specific investment?  Please clarify.

If so, Instructions for IRS form 1099-DIV may be found on page two:

Qualified Dividends 

Except as provided below, qualified dividends are dividends paid during the tax year from domestic corporations and qualified foreign corporations. 

Exceptions

The following dividends are not qualified dividends.....

[Mitzy20]

I am referring to dividends reported on the 1099-DIV in boxes 1a, 1b and 5.
When I enter boxes 1a and 1b, TT asks this question under "Do any of these uncommon situations apply?"

Some qualified dividends are from securities that didn't meet the required holding period

But, when Box 5 (section 199A) is entered (either alone or in combo with boxes 1a and 1b), this question is asked:
Some qualified dividends or section 199A dividends are from securities that didn't meet the required holding period.
What do I need to do to answer them?
Thanks

[ThomasM125]

What this means is that the reported dividends are qualified, provided you hold the associated security for the 60 days necessary to complete their qualification. For instance, you may have received a dividend from stock you purchased on day 1 and then you sold the stock ten days later. It may be reported to you as a qualifying dividend because it was accept for the holding period.  So you would have to look at what you purchased and sold and the associated holding periods to see if any of your dividends need to be reclassified as ordinary as opposed to qualified. 

[HulkinLA]

Doesn't that defeat the purpose of having the brokerage form already separate out dividends by whether the holding period requirement was met? I don't see how this answers the question. Why does Turbo Tax ask us whether the holding period was met if lines 1a and 1b on the 1099-Div are by definition separated according to that?

[Mitzy20]

agree with you @HulkinLA 

That was actually my original question. If dividends are being paid out AND there was a sale transaction for that security AND the holding period was not met, the dividend is by definition is not qualified. My question was are WE supposed to cross-reference every sale transaction with dividends paid (one of our accounts does tax loss harvesting and there are many sale transaction initiated by the software). We get the 1099-INT and 1099-B. I would think the brokerage is smart enough to properly categorize dividends correctly based on the security holding period.

[DianeW777 · Accepted solution]

As stated by our tax expert @JamesG1 after your original question.

• 'I think not.  The issuer of the IRS form 1099-DIV is charged with determining whether the transaction reported meets the requirements of a qualified dividend.'

Based on this you should proceed assuming the financial agent/issuer reported the information correctly and move on to complete that section.

As a tax expert, it's clear that the owners of the investments (individuals) are required to know all holding periods, cost basis, reinvested dividends, or distributed dividends, as well as all long term holding transactions. The IRS has given much more strict laws to the financial agents but it does not eliminate the required knowledge of the owner of the investments.

@Mitzy20 

@HulkinLA 

[Edited: 04/04/2026 | 11:55 PM PST]