2007-02-12 04:36:24 · 4 answers · asked by Joe Mamma 2 in Business & Finance ➔ Taxes ➔ United States
You do not get a deduction for reinvested dividends. Rather, the receipt of the dividends (doesn't matter if they were paid to you in cash, or if they were reinvested) is reportable as income. The amount reportable is shown on the 1099-DIV. This is reported on Schedule B of the Form 1040. If the dividends were reinvested into the mutual fund, then the amount that is reported and subject to tax for you will increase the basis in your investment in the mutual fund for purposes of determining your taxable gain or loss when you sell your interest in the mutual fund.
2007-02-12 04:51:18 · answer #1 · answered by jseah114 6 · 1⤊ 0⤋
You don't deduct reinvested dividents, you claim it as income. Yes, it'll be on the 1099-DIV. Keep track of it - when you sell, these amounts will be part of your cost basis since you'll have already paid taxes on them.
2007-02-12 16:54:18 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Yes. The 1099-DIV has two boxes - ordinary dividends and capital gain dividends. If you reinvested both types then add both boxes to cost basis. If you reinvested only one type then just add that type to cost basis.
2007-02-12 07:16:34 · answer #3 · answered by spicertax 5 · 0⤊ 0⤋
A 1099-DIV will indicate the amount
2007-02-12 04:43:25 · answer #4 · answered by Dizney 5 · 0⤊ 1⤋