Form 1099-DIV

Tax

Form 1099-DIV reports dividend income to taxpayers, issued by brokerages and mutual fund companies for dividends and capital gain distributions over $10. Box 1a: Total ordinary dividends. Box 1b: Qualified dividends (subset of 1a taxed at favorable rates). Box 2a: Total capital gain distributions (long-term). Box 3: Nondividend distributions (return of capital). Box 7: Foreign tax paid (potentially deductible or creditable). Mutual funds typically distribute realized capital gains in December — even buyers months earlier may receive these surprise distributions. Index ETFs are more tax-efficient than mutual funds due to in-kind redemption mechanisms minimizing distributed gains.