Reporting mutual fund dividends on 1099-DIV

If Fidelity totaled the 1099DIV amounts, just report the totals.

weird ? my Fidelity, Vanguard, TRowe, & Schwab all break things out -

just grabbed my Fidelity 1099-DIV, and on mine there is no total - just the individual line items -

However, if Fidelity listed each amount separately on the statement, you might want to do the same.

What I do for clients that have subsititute but combined reporting: List the name of the investment firm (with no dollar amount) indent with a dash and list each security paying, with each amount in the appropriate column of Schedule B.

It takes too much time to find out if the investment firm is sending a combined 1099 or one for each security. Too bad they don't tell us.

Take a closer look. Most of these "consolidated" 1099 packages I've seen first show the actual box numbers for the 1099-DIV with totals. Later, in a section that usually is headed by a statement that this information is not being sent to the IRS, there's a breakdown by fund. There's also usually a cover sheet with general information about the package.

Phil Marti VITA/TCE Volunteer

Fidelity sends me a piece of paper that has on it, among other things "Form 1099-DIV OMB No. 1545-0110 Copy B for Recipient"

That has all my dividends totalled up.

Later on they list the dividends broken down, but that part of the packet is explicitly labelled "This detail information is not reported to the IRS."

So why would I want to bother putting a breakdown on my Sched B instead of just putting down the single line?: National Financial Services LLC $XXX.YYY

-- Rich Carreiro snipped-for-privacy@rlcarr.com

What you're missing is that some brokers aren't doing it that way on their substitute-1099 statements. They have their itemized list of dividends by security and a total, but don't necessarily state if they've reported each security separately or only the total.

hmmm - I wonder if different folks are seeing different 1099's based upon a couple of different scenarios ?

I have a real Fidelity account - and only have Fidelity mutual funds. My 1099 has each fund listed as a line item.

Wonder if other folks/posters have Fidelity investments, but via different methods.... ie - Brokerage Services or a Fidelity fund via some "other" broker or account ?

In fact, my 1099 form has the text.....

"Tax reporting information is supplied to you by each fund as a separate reporting entity. The IRS requires Fidelity to report each mutual fund separately and to not include an aggregate total of all funds. Report these amounts on the IRS Form 1040 for each mutual fund. Do not report amounts in aggregate under Fidelity Investments."

I bet that's it.

As I recall, Fidelity does (or used to) distinguish between a Fidelity brokerage account (which can own anything instrument Fidelity transacts in, including Fidelity mutual funds) and a Fidelity mutual fund account (which is an "account" that can only hold Fidelity mutual funds).

My bet is that with the former, things are held in street name and therefore the entity that pays *you* the dividends really is Fidelity's clearing corp (National Financial Services, LLC) but in the latter case the "account" is just a way of grouping your Fido fund holdings for statement purposes but that you actually directly hold the mutual funds and so each one has to report to you on a separate 1099-DIV.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

How does that interact with the "Qualified Dividend" rules? (TDAmeritrade holds my stock in street name, but it still tells me which dividends it paid me substitutes for (due to my stock being borrowed), and which dividends were paid by the actual company (hence qualified).

Seth

I think tax law follows the "beneficial ownership" concept on this. Even though your stuff is held in street name by the broker (and to the broker is the reported payor on the 1099-DIV) you're the beneficial owner of the securities and so the qualified status passes through.

IMHO, that's distinct from the case of your stock being lent out. The stock in that case is, during the lent-out time, neither held by you or the broker (after all, you also lose the right to vote that stock should a record date for a vote occur while the stock is lent out).

But IANAL and all that.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

Essentially. The broker holding stock in street name is holding it in trust for the customer. And since the customer can cancel his account, it's a grantor trust.

Right. You should get something in exchange for lending your stock, but that's distinct from the dividends on the stock, which are treated as earned by the borrower.

| How does that interact with the "Qualified Dividend" rules? | (TDAmeritrade holds my stock in street name, but it still tells me | which dividends it paid me substitutes for (due to my stock being | borrowed), and which dividends were paid by the actual company (hence | qualified).

IIRC, when this first came up Fidelity sent out a notice explaining their scheme for compensating customers for the lost tax advantage (of the dividends that would have been qualified if the stock had not been lent) including the tax on the compensating amount of course, all based on a high (maybe the highest?) marginal rate. I've never seen this in action because my stock has never been lent. (I don't have margin enabled on any account which I think means they can't lend.)

Dan Lanciani ddl@danlan.*com

I have. TDAmeritrade's compensating payment was lower than my marginal rate. However, it put the income in a different category so it was eaten by a carryforward.

Seth

Or you might look at this as if the broker received the dividends as Noiminee for a few busloads of folks, each of whom it sends a