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Old 02-20-2015, 06:13 PM
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Capital Gains. I think.

Thanks for taking the time to read.

I have what I believe is a slightly complicated capital gains distribution. I was gifted shares of a privately held company from my grandparents a number of years ago, probably 15-20. This past year I received a dividend in the spring and later in the year sold some shares back to the company and received a check. I received a 1099-div form that listed the dividend amount, but has nothing in any of the capital gain distribution boxes.

I contacted the company, and was told that their tax advisor said while it is taxable income, they don't send 1099-b forms, only brokers do. Further questions led to suggestions of consulting a tax professional, which brought me here.

Am I correct in assuming this should be categorized as long term capital gains? Don't I need some piece of paper stating this to send in with my return? Can I pretend I never received it and hope it doesn't bite me in the rear?

Please let me know if I can provide any more info to help find an answer.

Thanks everyone!



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Old 02-21-2015, 01:32 AM
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I have what I believe is a slightly complicated capital gains distribution. I was gifted shares of a privately held company from my grandparents a number of years ago, probably 15-20. This past year I received a dividend in the spring and later in the year sold some shares back to the company and received a check. I received a 1099-div form that listed the dividend amount, but has nothing in any of the capital gain distribution boxes. ======>> since that net is a realized gain, it passes the gain through to you on a 1099 to be reported . If the net is a loss, the fund "retains" the loss to offset any gains in subsequent years. Box 2a shows total capital gain distributions ,long-term, from a regulated investment company or real estate investment trust. Amounts shown in boxes 2b, 2c, 2d, and 2e are included in box 2a.As you said it counts as capital gain and needs to be reported on 1099DIV box 2a. However,REIT and RIC distributions aren't counted as dividends, you count them as capital gains, which is true for complicated reasons relating to those particular corporate forms.

capital gain distributions are total capital gain distributions from a regulated investment company/ real estate investment trust. You need to report the amounts shown in box 2a on Sch D of Form 1040, line 13. But, if no amount is shown in boxes 2c–2d and your only capital gains /losses are capital gain distributions, you may be able to report the amounts shown in box 2a on line 13 of Form 1040 rather than Sch D.

I contacted the company, and was told that their tax advisor said while it is taxable income, they don't send 1099-b forms, only brokers do. Further questions led to suggestions of consulting a tax professional, which brought me here.==>> the form of 1099B / similar statement is issued by a broker fund(i.e., mutual fund) or barter exchange that summarizes the proceeds of all stock transactions. The sale of a stock will be accompanied by a gain or loss, which must be reported to the IRS when you file your taxes. Specifically, figures from form 1099-B are used on IRS Form 1040, Sch D as mentioned above.
Am I correct in assuming this should be categorized as long term capital gains?=========>>correct; capital gain distribution is taxed as long term regardless of how long you have owned the shares.

Don't I need some piece of paper stating this to send in with my return?========>>I guess not really;as said aslongas you had a capital gain , including any capital gain distributions you must complete and attach Sch D. Exception; you do not have to file Sch D if both of the following apply: 1) The only amounts you have to report on Sch D are capital gain distributions from Form 1099-DIV, box 2a. 2) None of the Form 1099-DIV or substitute statements have an amount in box 2b, box 2c , or box 2d .

If both of the above apply, you may enter your total capital gain distributions on line 13 and check the box on that line. But this is not your case.

If you do not have to file Sch D, you need to use the Qualified Dividends and Capital Gain Tax Worksheet on page 39 of instructions for form 1040 to estimate your tax liability on the gain.

Can I pretend I never received it and hope it doesn't bite me in the rear?=======>>no you ,aslongas you receive the gain, need to report it on your return. You report the sale on Sch D. The value of the stock received = the selling price of the stock surrendered. Mutual funds are required to pass along to investors the gains realized from trading securities. The distributions paid can be automatically reinvested into more shares. However, the capital gains distributions your fund account earned must be reported on your taxes, whether you took the distributions in cash or had them reinvested.



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