Mutual-fund distributions are reported to you and the IRS by the fund on Form 1099-DIV or substitute statement. Distributions that you reinvested to acquire additional shares are reported and taxed in the same way as distributions that are actually paid out to you.
The Form 1099-DIV (or substitute statement) from your fund for 2012 may show several kinds of distributions. Distributions that you reinvested (32.2) instead of receiving in cash are included on the Form 1099-DIV.
See Table 32-1 for details on how to report these and other distributions on your tax return.
Mutual funds sometimes declare dividends at the end of a calendar year but do not pay them until January of the following year. If the dividend is declared in October, November, or December, and paid in the following January, the fund will report the distribution as taxable in the year it is declared.
18.118.184.223