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Financial Planning / Tax Strategies
|Subject: Re: Basic Mutaul Fund/Tax Question||Date: 4/11/1998 3:08 PM|
|Author: tc001||Number: 3413 of 121095|
On 4/10 I responded to your question. What a difference a night's sleep makes. After my lengthy first answer I began to have some concerns about confusing rather than helping you.
The information specifically relating to 1040 Schedule B, 1040 Schedule D and the 1099 Boxes 1a, 1b, and 1c is correct, but when I reread your original question I wanted to add some more commentary. You said:
<<Seligman sent me a form with a dollar figure broken down into two sums, designated as (I don't have the form in front of me) "short term ..." and "long term ... " How do these relate to the schedule D form (1090?)>>
First, please check to make sure that the form *is* a Form 1099. This is the report that will be given to the IRS so it is this specific form that the tax numbers must be taken from. Do not use an account statement or summary. The form should clearly be labeled as 1099 or 1099-DIV.
Next, you mention the breakdown of short-term and long-term dollars. The 1099 will have the separate boxes that I listed. My concern is that you said only two numbers were shown. Typically, all three boxes will have numbers, with Box 1c being subdivided to show the 28% gain. This 28% gain is not really a short-term gain so I don't want to cause confusion.
Box 1a is the gross amount. Box 1b is dividends, whcih is where Sch.B comes into play. Box 1c is capital gains, which includes the amounts taxed at both the new (10%/20%) and old (28%) maximum tax rates.
Since you said you weren't really sure what was on the form because it was not in front of you at the time, this may all be very clear once you look at the form again. If not, let us know what information the form does contain.
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