1099-DIV has added short term capital gains to line 1a (Total ordinary dividends). Is this correct. Advisor said they are added together because they are taxed the same?

Forum|Forum|6 years ago
June 5, 2019
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JulieCo

Employee

Yes, short-term capital gains do not benefit from any special tax rate – they are taxed at the same rate as your ordinary income. For 2017, ordinary tax rates range from 10 percent to 39.6 percent, depending on your total taxable income.

Here is more information: Guide to Short-term vs Long-Term Capital Gains Tax

chuckcobb

I suspect that the short-term capital gains are already included in the total ordinary dividents on line 1a. It is posted on the new 1099 with an asterisk indicating that it is a footnote. It doesn't seem to make sense that you should have to add them together. Can someone please confirm that?

DavidD66

Mutual Funds report capital gain distributions on Form 1099-DIV. Short-term capital gains distributions are included with dividend and income distributions and are reported on tax returns as ordinary dividends on line 3b of the 2019 Form 1040. Long-term capital gains distributions are reported on line 6.

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chuckcobb

That really didn’t answer the question. Can you please read the question again?

Thanks

JulieS

Short term capital gains are included in box 1A because they are taxed at the same rate as dividends that are not qualified dividends. Your Advisor is correct about that.

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