short-term cap gains in mutual fund?


G

George

The "estimated 2006 capital gains distribution" for a mutual
fund of mine lists both short-term and long-term gains.
But, their 2005 1099 just listed "total" cap gains, which
also seems to be what TaxCut 2005 expected.

Googling around, it looks like short-term gains really are
supposed to be taxed as ordinary income, which sounds
vaguely familiar, but leaves me fairly befuddled.

- Did I screw up my 2005 taxes?
- Is something different for 2006?
- Something else?

Thanks,
George
 
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P

Phil Marti

George said:
The "estimated 2006 capital gains distribution" for a mutual
fund of mine lists both short-term and long-term gains.
But, their 2005 1099 just listed "total" cap gains, which
also seems to be what TaxCut 2005 expected.

Googling around, it looks like short-term gains really are
supposed to be taxed as ordinary income, which sounds
vaguely familiar, but leaves me fairly befuddled.

- Did I screw up my 2005 taxes?
- Is something different for 2006?
- Something else?
Short-term capital gains realized by the fund aren't
reported separately on the 1099 and are not included in the
cap gains amount. What they report as cap gains on the 1099
is what you report on your return as long-term gains.
 
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B

Benjamin Yazersky CPA

George said:
The "estimated 2006 capital gains distribution" for a mutual
fund of mine lists both short-term and long-term gains.
But, their 2005 1099 just listed "total" cap gains, which
also seems to be what TaxCut 2005 expected.

Googling around, it looks like short-term gains really are
supposed to be taxed as ordinary income, which sounds
vaguely familiar, but leaves me fairly befuddled.

- Did I screw up my 2005 taxes?
- Is something different for 2006?
- Something else?
Short term capital gains are normally included in the
ordinary dividends amount. They are not qualified dividends.

This type of 1099 reporting can cause issues with fiduciary
accounting where short term gains need to be segregated.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----
 
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