Discussion:Mutual Fund Short-Term Capital Gain Distributions

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Discussion Forum Index --> Basic Tax Questions --> Mutual Fund Short-Term Capital Gain Distributions
Discussion Forum Index --> Tax Questions --> Mutual Fund Short-Term Capital Gain Distributions

David355 (talk\|edits) said:	6 February 2008
Short-term capital gain distributions made by mutual funds are reported as and taxed as dividend income. After some research I was unable to find authority for requiring this treatment. Can someone direct me to the authority for this tax treatment? If other short-term capital losses could offset these mutual fund short-term capital gains, it would be very beneficial in some situations. Thanks!

Pegoo (talk\|edits) said:	6 February 2008
David you got yourself mixed up between dividends and capital gains. You do realize the holder is still holding on to his/her mutual fund. How does a dividend be classified as a capital gain? Shrugs*

DerekCPA (talk\|edits) said:	6 February 2008
Usually , capital gains distributions are reported on 1099DIV as a separate item. They are input as capital gain distributions and flow through to Schedule D, if schedule D is necessary or if not, page 1 of the return. The question is, capital gains distributions are not usually marked LT OR ST. How are you deriving these as ST ?

Eastendcpa (talk|edits) said:

6 February 2008

This topic caught my attention because I was completing a sub s return yesterday and on the year end statement for the investment account(the corporation does not get a 1099) they had ST capital gain distributions. It was a very small amount so I lumped it with the LT cap-gain distributions. I though to myself..gee I don't recall seeing ST cap gain distributions being reported before. Why couldn't they just call it dividends?