How Do You Report Short Term Capital Gains Of Mutual Funds?
Short-term capital gains must be reported on Form 1040 when you file your taxes. If your mutual fund makes a distribution, you must consult the year-end paperwork you receive from your financial institution to determine what was a short-term gain as opposed to a long-term gain or a dividend. Additionally, if you sold shares of your mutual fund, you must make your own determination of whether this gain is short-term or long-term. This is an important distinction since each of these distributions can be taxed differently. Look at your Form 1099-DIV. If you received any long-term capital gains, they will appear in box 2a. However, if you received any short-term capital gain distributions, they will appear as ordinary dividends in box 1a. Short-term capital gains are taxed at the same rate as ordinary dividends, as opposed to the more preferential tax rate accorded to long-term capital gains, and so they appear as dividend payments, which are taxed in a similar manner. Report your short-te
