Conference nyoss1::market_investing

    Look at the substitute 1099 (or the real 1099, if they sent you one.)
    
    Dividends are taxable in the year received.  Distributions of capital
    reduce your basis in the asset.  However, capital gains distribution is
    reportable on the "D"... Examine the 1099.  It should show the
    breakdown as to which money came from which source.  Then, pretty much
    just follow the form (Schedule B for a 1040) you'll see how to report
    it.
    
    
    You list the whole amount as divident received, then subtract out the
    "distribution of capital" and the "capital gains distribution" amounts
    at the bottom of the "B", which might send you to the "D"...(and the
    thigh bone's connected to the...:-)
    
    Steve

	Re: .0

	Reply 1 is correct, but I just want to add one comment.  The way to
look at the distribution that you received and reconcile it with your fund
statement is to pretend that you physically received a distribution check
(which is taxable income) and then decided to reinvest that money into the
fund.

								-craig

    re: .1 & .2
    
    Thanks for the information! I'll go back to my 1991 (tax) instruction
    book and try to understand this better. BTW, I called my mutual fund
    company and they weren't much help at all. The customer services rep.
    on the other end of the phone couldn't really explain where my gain is. 
    
    Mike 

re: 82.0

Yes, the $1000 is fully taxable. You did what is called "buying a dividend".
The prospectus for many mutual funds describes this.

When buying any mutual fund, it is a good idea to inquire as to their next 
expected divident record date and the expected size of any dividend. Many funds 
will give you a reasonable estimate.

Call Vanguard and for $5 you can get a pretty good book on mutual fund tax 
issues.

End of year is toughest tho, because funds sometimes distribute dividends twice.
For example, two of my funds that pay dividends only annually, paid dividends in
both December and January. This is done to avoid the fund having to pay a 4% 
excise tax on certain types of undistributed dividends.

    
    I have a question on recording the gain/loss on Sch. D....
    
    Suppose I buy shares over a period of time (dollar cost avg) and
    sell them at a later date.
    
    Do I have to list individual transaction right on Sch.D?
                           (or)
    Attach a worksheet for the details and list the summary on Sch.D?
    (Is is this allowed by IRS
    
    Eg:
    
    Date      Shares bought   Shares sold
    
    1/91             5.0
    2/91             5.2
     ................
    11/91            5.1
    
    12/91                         50 
                
    On Sch.D, can I summarize like ...
    
    date sold   date bought   shares bought  shares sold
    12/91       1/91 to 11/91    55.2           50       etc
    
    and then attach a worksheet with detailed table
    
    The reason I am asking this is if you have multiple transactions w/
    multiple funds, the transactions can run into pages.
    
    RSVP
    
    Regards,
    
    === Raj
    

I just happened to call the IRS this morning to ask this exact same question
since I sold a bunch of stock I had acquired through a dividend reinvestment
program.  You're approach is correct, just remember to separate the transactions
into long and short term if that's applicable to you.  And you don't have to
attach a detailed schedule of the transactions to your taxes.  Just keep them
with your records and you should be all set.

  I agree.  I have been doing this for years and it sure takes up a LOT less
space on the forms.

    re. last few
    
    This method of reporting mutual fund sales on sch D is known as the
    "single-category method". (double category if you have both short and
    long term gains for the particular fund).
    
    Basically you add up what you paid for the shares over the purchase period
    - this is you cost basis. Then you enter what you made on the shares
    in the loss or gain column. I belive you are supposed to make a
    notation that you are using the "single-category method".
    
    The wall street journal had some articles on taxes and mutual funds
    in the last month or 2. 
    
    Any you can get the IRS publication 564 Mutual Fund Distributions
    by calling 800 - 829-3676.
    
    Mark

           Does one even have to report capital gains on Mutual Funds, if
           they're reinvested?
           
           Steve

    re: .9
    
    Yes, you have to, unless your MF account is a tax deferred account such
    as IRA or 401K.
    
    Mike

<           Does one even have to report capital gains on Mutual Funds, if
<           they're reinvested?


Yes, you must report all of the fund distributions even if they are 
re-invested.  You have to keep track of the amounts and dates of the 
re-investment and treat the amounts as aditional purchases.  When you 
sell the capital gains = sale ammount - (money you put in + all re-invested
dividends).

Brian

    
    The mutual fund submits a 1099-DIV to the IRS showing the gains and
    dividends you received. So you do have to pay taxes. The fact that
    you bought more funds instead of taking cash doesn't make any
    difference. 
    

	Re. the example in .5 and "single category method", what if you 
	haven't sold *all* your holdings. E.g. you bought 55 over a 1 year 
	period and sold only 50 of those. Do you take the average of the 
	purchase prices to compute the cost/share and then multiply by 50?

	I would also like to borrow IRS publications 550 and 564 for a short
	while (before April 15th :-). If someone has a copy that they do not
	need, would you mail it to me (Amitabh Shah, TAY1). For your favor, I
	will gratefully offer you a cup of gourmet coffee when you are at TAY1;
	indeed, I will personally pour it for you :-).

If you're asking for someone to send it via interoffice mail, you may not get
it by April 15 -- in fact, you may not get it at all.  Your local public
library should have copies of all the IRS publications.  I'd suggest ordering
from the IRS's forms number (800-TAX-FORM), but I think it takes about 2 weeks
for you to get the forms.

I have a question about reporting the proceeds on the sale of all the
shares of a mutual fund owned since 1989 (all income was reinvested). Using
the Average cost - single category:

Date	Transaction    Amt.	  #shares   Price      Cum. cost   Avg. cost
				            @ sh.      basis       per share

8/89	New Invest.    $5,000.00  374.0	    $13.37     $5,000	
12/89	Income rein.	   48.62    3.7	     13.31	5,048.62
12/89   Cap. gains rein.   48.62    3.7	     13.31	5,097.24
12/90   Income rein.      114.38    8.9      12.91      5,211.62          

Total                             390.3                 5,211.62   $13.35 
                                  
5/91    Sold all	6,109.56  390.3	     15.65	

The average cost per share was $13.35  ($5,211.62/390.3).  This, subtracted
from $15.65, the sale price per share, gives a gain of $2.30 per share, or
total of $897.69. I think this is correct, so far.

    However, the question is:

    Not all of the shares reinvested were long term capital gains since the
    last shares purchased were in 12/90  -- only 5 months before all the
    shares were sold.  Does the capital gain from this particular mutual
    fund have to be "split up" and reported in both Parts I and II of
    Schedule D?  For example: a $20.00 short term gain for the 8.9 shares
    purchased in 12/90 and a $877.00 gain for the long term gain for the
    remaining shares held longer than 1 year?  Aren't short and long term
    capital taxed the same?

    Thanks a lot.

    Diana
 
    

    

    
    yes should be split up even tho they are taxed at the same rate. 
    

    
    Take it from one who knows: DON'T LOSE YOUR FUND STATEMENTS!
    
    My wife and I sold all our shares in a Salomon Brothers mutual fund
    last summer which we have owned since an initial purchase in 1986 and
    subsequent reinvested dividends and cap gains.
    
    I sat down the other night to do my taxes, and to my horror realized
    that somehow I managed to lose the file containing all the statements for
    this fund! All I have is the 1099-B form from Salomon. Salomon tells me
    they'll sell me a copy of my account history for $10, but they won't
    tell me over the phone what my initial purchase was or at what
    price/share. They say it may take up to 4 weeks to generate the
    history.    
    
    I have a feeling I'll be filing late this year .... :-(
    
    Brian

    Is anybody aware of any software package that will calculate the ave
    basis per share for Sch D purposes for mutual funds?
    
    Thanks,
    
    Krish

	Re. .18

	Quicken would do it for you, among others. 

	BTW, some mutual fund families are computing the gains/losses for
	you and including them with the 1099's. Dreyfus did it for me. I
	believe SEC(?) is thinking of *requiring* all of them to do the
	computations. 

it just hasn't officially gone into effect yet.  Some companies like Scudder and
Dreyfus are just getting ahead of the requirement.

/mtb