Question

1099-DIV showing capital gains after a transfer from one broker to another

Forum|Forum|4 years ago
February 6, 2022
2 replies
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I transferred a mutual fund from TROWEPRICE to SCHWAB. The TROWEPRICE 1099-Div form in box 2b indicates capital gains which did not occur since it was only a transfer, and nothing was sold. If you enter amount that in the 1099-DIV form in 2b then TurboTax it treats it as capital gains and increases the taxes owed accordingly. SCHWAB tax people have verified no sale took place and said if it is not on a 1099-B form ignore it.

If capital gains should only be reported via a 1099-B form, why is it on the 1099-DIV form and why would TurboTax treat it like capital gains.

Very confused.

X

XaraxAuthor

..that is Box 2A not 2B

H

HelenC12

@Xarax

From the information provided, it appears the mutual fund has issued a capital gain distribution (not a sale) and that is why you received form 1099-DIV. The fact that you transferred the money from one institution to another is irrelevant. You would have received the 1099-DIV even if you didn't transfer financial institutions.

Note: Form 1099-DIV Box 2a. Shows total capital gain distributions from a regulated investment company (RIC) or real estate investment trust (REIT).

[Edited 2-6-22|8:35 am PST]

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fanfare

Employee

Schwab should be able to give better answers.

1099-DIV is a tax document and you have to report it.

X

XaraxAuthor

So, T Rowe Price rep says the large amount listed in Box 2A is from internal management of the fund and not due to the transfer. That is one heck of a tax bill they created for me.

T

TomD8

Employee

@Xarax --

People do sometimes get caught by surprise by large capital gain distributions. One suggestion: check your mutual funds' websites in late fall every year and you should be able to see if a capital gain distribution is coming. Those distributions are usually made late in the year, November or December.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.