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Author: ssir5 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121600  
Subject: Dividends and Capital Gains? Date: 3/6/1998 2:30 PM
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Greetings Fools,

I am a new investor and 1997 earned me a few dollars
in dividends. Here is what I got in 1997 :

1. Dividend from Savings Account
2. Dividend from my DRIPs.
3. Distributions from my Index Fund because of
turnover in 1997.

Are all of these reported as Dividends? Or should I
be filing Schedule D for (3) and at what rate (28% or
20%)?

Any help would be greatly appreciated,

Regards

Nikhil Bhat
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2510 of 121600
Subject: Re: Dividends and Capital Gains? Date: 3/9/1998 10:05 AM
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[[I am a new investor and 1997 earned me a few dollars
in dividends. Here is what I got in 1997 :

1. Dividend from Savings Account]]

Generally, savings accounts are INTEREST...and not dividends. Even if your savings account is in a credit union, and the credit union calls it a dividend. The credit union will still report the interest to you on Form 1099INT. Which means it is an interest payment.

[[ 2. Dividend from my DRIPs.]]

These are certainly dividends, and should be reported as such.

[[ 3. Distributions from my Index Fund because of
turnover in 1997.]]

You may have dividends and/or capital distributions. You'll have to go to the explanation provided to you with your 1099 from the mutual fund company in order to read the form and put the numbers in the right place. Your "regular" dividends will be reported on Sch B. Your capital gain dividends will be reported on Sch D.

[[ Are all of these reported as Dividends? Or should I
be filing Schedule D for (3) and at what rate (28% or
20%)?]]

the information provided with your mtutual fund should provide you with the information of which long term capital gains (Sch D) are 20% gains and/or 28% gains. And the instructions to Schedule D will help you with the rest.

TMF Taxes
Roy

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