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Understanding Your Tax Reporting Statement for Brokerage Accounts

Each year, Fidelity mails tax statements to customers subject to IRS Form 1099 reporting. This guide can help you understand your tax statement which provides information that you will need when you complete your federal and state income tax returns.

Fidelity's 2013 consolidated statement consists of two parts:

  • Tax reporting statement—The information we report to the IRS on Forms 1099-DIV, 1099-INT, 1099-MISC, 1099-B, and 1099-OID. Fidelity incorporates these separate, stand-alone forms on one consolidated statement. The titles, line and column headings, and box numbers used on our consolidated statement correspond to those used on each of the stand-alone IRS forms.
  • Supplemental information—Additional information (not reported to the IRS) that you may find helpful in preparing your income tax returns, including transaction activity details.

The pictures from a statement, presented below, are for illustrative purposes only. Note: certain categories of transactions may not pertain to your account as your individual statement is generated based on your account activity. For instance, your statement will only include a Form 1099-B and/or a Form 1099-OID, if you had any applicable 2013 transactions.

1099-DIV—Dividends and Distributions

Lists all taxable dividends, long-term capital gain distributions, nondividend distributions, and certain investment expenses, foreign tax paid, and tax-exempt interest dividends and private activity bond interest dividends (mainly from mutual funds or other regulated investment companies). The 1099-DIV information may include dividends and/or distributions from the mutual fund you use as your core money market fund. When computing any Alternative Minimum Tax (AMT) liability, see the IRS Instructions for Form 6251, Alternative Minimum Tax-Individuals (PDF), the IRS requires you to include any private activity bond interest dividends in this calculation. Dividends and capital gain distributions reported on Form 1099-DIV must be reported on your federal income tax return regardless of whether they were paid in cash or reinvested.

We report all dividends in U.S. dollars (USD). If the dividends that you received were paid in a currency other than USD, we convert the foreign currency dividends into USD and report the USD equivalent on Form 1099-DIV.

The dividend amounts that we report may be higher than the amounts that you actually received. For example, if foreign tax was paid, the amount that you may be able to claim as a deduction or credit is reported in Line 6 on Form 1099-DIV and that amount is also included in the dividend amount reported in Line 1a and, if applicable, Line 1b. For this reason, the total dividends reported on the form may be higher than the amount that you actually received. Starting in early February, you will be able to find additional 2013 foreign tax credit pass-through information on the Fidelity Mutual Fund Tax Information page. IRS reporting requirements governing widely held fixed investment trusts (WHFITs) are another situation where Fidelity may report a dividend amount higher than the amount you may have received. If you owned certain unit investment trusts or HOLDRS trusts, Fidelity reports investment expenses on Line 5. We also include those expenses in the dividends reported in Line 1a, because we are required to report gross trust dividends including expenses. Because we are reporting gross dividends, the total dividends reported on the form may be higher than the amount that you actually received. The same situation may occur for tax-exempt interest dividends, reported on line 10. These expenses are not included on line 5. Instead, they are listed in the Supplemental Tax-Exempt Investment Expense section, which you may find near the end of your statement if there are appropriate expenses to report. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF), or consult your tax advisor.

1099–INT—Interest Income

Lists all interest earned on government and corporate debt obligations and short-term certificates of deposit, as well as interest earned from cash in your account.

Line 8 reports tax-exempt interest from individual securities, but not from mutual funds or other regulated investment companies. We report those tax-exempt interest dividends on Form 1099-DIV, as described above. In addition to your federal tax return, you may also be required to report this information on your state income tax return.

Line 9 reports any applicable specified private activity bond interest. Specified private activity bond interest must be taken into account in computing federal Alternative Minimum Tax (AMT). The tax-exempt interest reported on Line 8 includes this specified private activity bond interest, if any. For more information, see the IRS Instructions for Form 6251, Alternative Minimum Tax–Individuals. In addition to federal reporting, Fidelity may be required to report all or a portion of your total exempt income to California or to other state tax authorities.

Line 10 shows CUSIP numbers for tax-exempt securities on which tax-exempt interest was paid to you during the calendar year and reported on Line 8. In cases in which we are reporting tax-exempt interest from more than one CUSIP, the line is marked, "various."

Due to IRS reporting requirements governing widely held fixed investment trusts (WHFITs), for certain unit investment trusts or mortgage-backed securities distributing taxable interest, Fidelity reports your prorated share of investment expenses in Line 5. Those expenses are also included in the interest reported in Line 1 because we are required to report your share of any unit investment trust or mortgage-backed security gross interest before expenses were subtracted. For this reason, the interest reported on the form may be higher than the amount that you actually received. In the same manner, we also include your prorated share of tax-exempt interest investment expenses in the amount reported in tax-exempt interest on Line 8. We provide details on those expenses in the Tax-Exempt Interest Investment Expenses section (shown if applicable) near the end of the supplemental section of your tax statement. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF), or consult your tax advisor.

We report all interest in U.S. dollars (USD). If the interest that you received was paid in a currency other than USD, we convert the foreign currency interest into USD and report the USD-equivalent on Form 1099-INT.

1099–MISC—Miscellaneous Income

Lists other reportable income, such as royalty payments from grantor trusts, other income, and substitute payments made in lieu of dividends. Royalty payments are generally reported on your federal income tax return, Form 1040, Schedule E.

Beginning with 2013 we report Line 3, Other Income, on this consolidated Tax Reporting Statement. In past years we reported Other Income on a statement, mailed separately. Other Income includes credit adjustments for substitute payments in lieu of qualified dividends, or certain credits, adjustments, or other income. Following IRS regulations, Fidelity reports Other Income if you received other miscellaneous income totaling at least $600 during the tax year. We determine your total other income by adding together the other miscellaneous income amounts in all your accounts (under the same Taxpayer ID) for which National Financial Services LLC (NFS) is the payer. NFS is considered the payer for a number of broker-dealers, including Fidelity Brokerage Services LLC, because of the tax reporting services it performs for them. See the FAQ in this guide, "I did not receive a separate Form 1099-MISC, reporting 'Other Income,' (Line 3). Where is it?"

Substitute payments in lieu of dividends are generally reported on the "other income" line of your federal income tax return, Form 1040, and should be taxed at ordinary federal income tax rates. See Annual Credit for Substitute Payments for additional information on credit adjustments paid by Fidelity for substitute payments in lieu of qualified dividends. Due to IRS reporting requirements governing widely held fixed investment trusts, if you owned certain royalty or HOLDRS trusts, Fidelity reports various expenses, as well as adjustments which affect the estimated cost basis of your shares, in the applicable supplemental sections of your tax statement. We also include your pro-rated share of those expenses in the royalties (Line 2) reported in the 1099-MISC, because we are required to report your royalties before expenses were subtracted. For this reason, Fidelity may report a higher amount of royalties than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations. In addition, by March 17, if you owned a royalty trust, Fidelity may post online additional information relayed to us by the royalty trust. For more information, see IRS Publication 550, Investment Income and Expenses (PDF), or consult your tax advisor.

Summary of Proceeds from Broker and Barter Exchange Transactions

Lists gross proceeds less commissions from sales.

Summary of Original Issue Discount

Lists total original issue discount.

1099–B—Proceeds from Broker and Barter Exchange Transactions

Form 1099-B lists all proceeds from the sale or other disposition of stocks, bonds, mutual funds; subscription rights expiring with a cash equivalent, taxable tenders and mergers; and short sales if opened no earlier than 2011 and closed in 2013. We report all transactions on a trade-date basis and they are the net amount after commissions. The cost basis reported reflects certain adjustments, if applicable. You may be required to make additional adjustments to properly calculate your taxable gain/loss. We are required to report most 1099-B information to you and the IRS.

To complete your federal income tax return, you are required to provide the cost basis for shares you sold in the past year in order to determine your realized gain or loss. Lower tax rates (20%, 15%, or, for those taxpayers in the two lowest tax brackets, 0%) apply to any long-term capital gains realized on the sale or redemption of securities (including the exchange of mutual fund shares). In general customers must report the information from Form 1099-B by completing Form 8949 (PDF) and/or Form 1040, Schedule D (PDF). Help Completing Your 2013 Form 1040, Schedule D may assist you as you prepare your tax return.

2013 update on cost basis reporting to the IRS

The IRS provided financial institutions with further details concerning their cost basis reporting responsibilities for "covered securities" during and following the multiyear implementation period which began in 2011. They recently provided cost basis reporting details for fixed-income securities and for options.

Covered securities

Generally, the regulations define covered securities as:

  • 2011 – Stock in a corporation purchased on or after January 1, 2011 (not including stocks eligible for average basis)
  • 2012 – Shares of registered investment companies, including open-end mutual funds, and stocks acquired in dividend reinvestment plans (DRIPs), purchased on or after January 1, 2012
  • 2014 – Less complex debt securities that have a single fixed payment schedule as well as a maturity date, and were acquired on or after January 1, 2014. Equity options and Section 1256 options, as defined by the IRS, also qualify as covered securities as of the same acquisition date.
  • 2015 – Transfer statement reporting (for example, when you move your account from one firm to another) begins for all equity options and less complex fixed income securities.
  • 2016 – Complex debt instruments (acquired on or after January 1, 2016), including those with more than one stated rate of interest, convertible debt, stripped bonds or stripped coupons, non-dollar denominated debt, tax credit bonds, debt with a payment in kind (PIK) feature, foreign debt issued by a non-U.S. issuer, contingent payment debt, and inflation-indexed debt.
  • 2017 – Transfer statement reporting by brokers begins for all complex debt issues that are covered as of January 1, 2016.

Noncovered securities

Noncovered securities include the types of securities, described above, whose acquisition and/or disposition dates are older than the applicable dates for covered securities. When the information is available in our records, Fidelity also provides cost basis information for sales, redemptions, and exchanges of noncovered securities in separate sections of Form 1099-B. However, we do not report this cost basis information to the IRS.

The following securities are classified as noncovered:

  • Short-term debt (maturity of less than 366 days)
  • Real estate mortgage investment conduits (REMICs)
  • Securities from the Federal National Mortgage Association and the Government National Mortgage Association (Freddy Macs and Ginny Maes)

How Fidelity reports covered and noncovered shares on Form 1099-B*

In order to facilitate completing Form 8949 and/or Schedule D, your Form 1099-B presents information in an order similar to the 8949/Schedule D order. Form 1099-B also presents information in as many as five different sections: short-term covered, short-term noncovered, long-term covered, long-term noncovered, and a section for transactions whose basis is not reported the IRS and whose term is unknown.

Fidelity has provided most of this cost basis information to customers for many years. It is the requirement that we also convey cost basis information to the IRS that is at the heart of the changes to Form 1099-B. Prior to 2011, Fidelity provided cost basis information in the Supplemental Realized Gain/Loss Sections of the Tax Reporting Statement. Beginning with tax year 2011, we moved most of this information to Form 1099-B.

For every transaction reported on the 1099-B (whether concerning a covered or noncovered security), Fidelity reports the following information to the IRS:

  • Description (8)
  • Date of Sale or Exchange (1a)
  • Sales Price (2a)
  • Federal Income Tax Withheld (4).

Note that the numbers following each category correspond to the equivalent box numbers on the stand-alone IRS Form 1099-B.

The cost basis information that we provide to the IRS, when applicable, includes

  • Date of Acquisition (1b)
  • The holding period of the security that you sold (short-term, long-term or unknown) (1c)
  • Cost Basis (3)
  • Wash Sale Loss Disallowed (5)
  • Basis is reported to the IRS (6)

The supplemental realized gain/loss sections in your 2013 tax statement continue to provide additional cost basis information for fixed income securities purchased either above or below par, for options transactions, and for security transactions conducted in a currency other than U.S. dollars.

Generally, as you complete your tax returns, you must report all transactions from Form 1099-B and any other transactions including those listed on the Supplemental Realized Gain/Loss sections of the tax statement, whether for covered or non-covered securities.

Here is a summary of where you will find transaction information for various kinds of securities.

Type of security Location of cost basis information in your tax statement
  • Equities
  • Mutual funds and other securities in dividend reinvestment plans
  • Fixed-income securities without adjustments
  • Short sales opened in 2011–2013 and closed during 2013
1099-B only
  • Foreign equities
  • Foreign Fixed-income securities
  • Domestic Fixed-income securities with cost basis adjustments
1099-B
Additional information is also provided in the Realized Gain/Loss sections of the supplemental pages
  • Options
  • Short sales, opened prior to 2011 and closed in 2013
  • Foreign currency transactions
Supplemental Realized Gain/Loss sections only

Mutual funds and other securities in dividend reinvestment plans (DRIPs)—bifurcation of information

Fidelity reports cost basis on the 1099-B to you and the IRS (for covered shares only) using the average cost method, unless you specified another applicable method prior to trade settlement.

Positions, using the average cost calculation method, that include both noncovered and covered shares are considered bifurcated. As such, these positions comprise the following:

  • Shares acquired prior to January 1, 2012
  • Additional share purchases that occur on or after January 1, 2012, of the same mutual fund

For mutual fund positions that are considered bifurcated

  • The average cost basis for covered and noncovered lots is calculated separately.
  • Fidelity only reports cost basis for covered lots to the IRS. It does not report cost basis for noncovered lots to the IRS. See Help Completing Your 2013 Form 1040, Schedule D for more information about bifurcation.

Reporting short sales

Beginning with tax year 2011, the new IRS cost basis reporting rules require us to report on Form 1099-B all short sales in the year in which the short sale is closed. Before tax year 2011, we were also required to report short sales on Form 1099-B, but only when they were opened. Short sales opened prior to 2011 and closed in 2013 are an exception to this rule. Those transactions are reported instead in the Supplemental Realized Gain/Loss sections of your tax statement. In this way, we avoid reporting the same short sale twice to the IRS. The IRS generally requires shareholders to report all short sales in the year that the short sale is closed —this is not a change from prior years.

Widely held fixed investment trusts (WHFITs) reporting—return of principal

Due to IRS reporting requirements governing WHFITs, we report your prorated share of the sales proceeds from the portfolios of unit investment trusts, securities derived from mortgage pools, or real estate investment conduits (REMICs) as return of principal on Form 1099-B (reported as PRINCIPAL on the form). We report your share of return of principal, whether or not you actually received a payment, because we report gross return of principal before any expenses were deducted. These reported proceeds may not match any distributions that you may have received during the year. Furthermore, for WHFIT securities, due to "receipt-based" reporting rules, your trust is required to report your prorated share of sales proceeds as of the date that they were sold by the trust and your prorated share of expenses as of the date on which they were incurred by the trust-not on the date any such sales proceeds are distributed to shareholders. This means that you may only have received a return of principal payment, listed on your 2013 Form 1099-B, in January or February 2014. You must generally report return of principal on Form 8949 and/or Schedule D in order to match our reporting to the IRS on Form 1099-B. In addition, you should generally reduce your security's basis by the amount of the return of principal. Fidelity includes return of principal in our calculation of your estimated cost basis. If your basis is reduced to zero, any additional return of principal should also be reported as a short-term or a long-term gain, depending upon how long you have owned the security.

Foreign securities

We report all proceeds in U.S. dollars (USD) on Form 1099-B. If the proceeds that you received from a transaction were paid in a currency other than USD, we convert those foreign currency proceeds into USD based on exchange rates on the trade date of the transaction and report those USD-equivalent proceeds on Form 1099-B. We provide additional information regarding such transactions in the Realized Gain/Loss sections of the Supplemental Information pages of this statement.

*Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for tax purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

1099–OID—Original Issue Discount

Lists the Original Issue Discount (OID) that you must report for the current year. OID reports the earned portion of the difference between the stated redemption price at maturity (if greater than one year) and the issue price of a bond, debenture, note, or other evidence of indebtedness issued at a discount (e.g., zero-coupon bond, long-term CD) that is attributable to the selected tax year. OID on Treasury obligations, listed in Column 8, is exempt from state and local income taxes. If you hold collateralized debt obligations (CDO), which include real estate mortgage investment conduits (REMIC) and collateralized mortgage obligations (CMO), you may receive a separate 1099-OID form in March to report this OID. You may need to make certain adjustments to this information. Consult your tax advisor or see IRS Publication 1212 Guide to Original Issue Discount (OID) Instruments (PDF) for more specific reporting information.

Details of 1099-DIV Transactions

The Details of 1099-DIV Transactions section is divided into three subsections: Total Ordinary Dividends and Distributions Detail; Total Capital Gains Distributions Detail; and Other Distributions, Tax, and Expense Details. Each of these subsections appear only if they apply to the transactions reported on your 1099-DIV.

We identify the short-term capital gain distributions portion of ordinary dividend distributions in this section. Generally, short-term capital gain distributions are nonqualified dividends, and as such, are taxed as ordinary income. However, a portion of the short-term capital gain distribution may be a qualified dividend and subject to one of the lower federal long-term capital gain tax rates. Any portion of the short-term capital gain distribution that is potentially subject to one of the lower tax rates is included as qualified dividends in Line 1b.

The 2013 Percentage of Income from U.S. Government securities letter for applicable Fidelity Funds will be available in early January in Fidelity's Tax Center. You may find this letter useful if you received dividends from Fidelity Funds that received income from U.S. Government securities.

Form 1099-DIV provides tax-exempt interest dividend and specified private activity bond interest dividend amounts (mainly from mutual funds or other regulated investment companies) on lines 10 and 11. For state tax-exempt information for Fidelity federal tax-exempt funds, in early January you will be able to see the Percentage of State Tax-Exempt Income letters on the Fidelity Fund-Specific Tax Information page.

Any reported foreign tax paid on Line 6 is also included in the dividends reported on Line 1a and, if applicable, Line 1b. For mutual funds, you will see such individual foreign tax entries (Line 6) as part or all of certain matching individual entries for Lines 1a and 1b. For individual securities we do not give such a payment-by-payment accounting. For additional 2013 foreign tax credit pass-through information for Fidelity mutual funds, in early February you will be able to see the Important Information for Individuals about Foreign Tax Paid letter on the Fidelity Fund-Specific Tax Information page.

Due to IRS reporting requirements governing widely held fixed investment trusts (WHFITs) the dividend amounts that we report for these securities may be higher than the amounts that you actually received. In each case this is due to the requirement that we report gross dividends before any expenses have been deducted. For WHFITs, dividends are reported as of the declaration date, not the distribution date.

Undistributed income from a unit investment trust (UIT)

You may find a 12/31 reporting item from your UIT, listed for Lines 1 and/or 2, which is income undistributed by your trust. Due to IRS reporting requirements, we report this income, even if it was undistributed. Once distributed in the following year, this income will be reported as a positive amount (since you have now received a distribution) and a negative amount (since it was previously listed as an undistributed distribution), thereby avoiding reporting the same distribution twice.

Total Capital Gains Distributions Detail

Total Capital Gain Distributions (2a) may include, if applicable Unrecaptured Section 1250 Gain (2b), Section 1202 (28%) Gain (2c), and Gains from Collectibles (28%) (2d). The portion of Capital Gain Distributions subject to 15% Rate Gain is equal to (2a) less amounts shown in columns (2b) through (2d). There is also a separate column, listing these 15% rate gain details in this section.

Other Distributions, Tax and Expense Detail

Non-dividend distributions, state tax withholding information (applicable this year to a small number of California residents only), as well as investment expense details and employer-sponsored stock plan liquidation distribution information are all listed in this section.

The amount of any non-dividend distributions (column 3) you received generally reduces the basis for the applicable security by the same amount of the distribution.

If you owned certain unit investment trusts, or HOLDRS trusts, Fidelity reports the investment expense details for expenses reported on Line 5. We also include those expenses in the dividends that we report. For this reason, the total reported gross dividends may be higher than the amount that you actually received. Investment expenses are generally deductible, subject to applicable limitations. Tax-exempt interest dividend details, reported in column 10, are not included in line 5. Instead, they are listed in the Supplemental Tax-Exempt Investment Expense section which you may find near the end of your statement if there are appropriate expenses to report.

For more information, see IRS Publication 550, Investment Income and Expenses (PDF), or consult your tax advisor.

Details of 1099-INT Transactions

We present Interest Income details in two subsections: Interest Income Details, including Corporate and Tax-Exempt Obligations, and Other Interest Details, Including U.S. Government Securities. Each of these subsections appear only if they apply to the amounts reported on your 1099-INT.

Interest Income Details, including Corporate and Tax-Exempt Obligations

We show Interest Income (1) details (a combination of Interest Payments received, Accrued Interest received on the Sale of Bonds, and OID Paid to you on Short-Term Instruments), as well as Tax-Exempt Interest (8), Specified Private Activity Bond Interest (9), and Foreign Tax Paid (6) details in this subsection. Any Specified Private Activity Bond Interest (9) amounts are also included in the Tax-Exempt Interest (8) column. Generally Specified Private Activity Bond Interest must be included in the calculation of Alternative Minimum Tax (AMT).

Other Interest Details, Including U.S. Government Securities

We show Interest on U.S. Savings Bonds and Treasury Obligations (3) (a combination of Interest Payments on Treasury Bonds and Notes, Accrued Interest you received on the Sale of Treasury Instruments, and U.S. T-Bill Interest) in this subsection, as well as Federal Income Tax Withheld (if any) on interest reported on the 1099-INT.

IRS reporting requirements governing widely held fixed investment trusts (WHFITs)

Due to the WHFIT requirements, we must generally report income based upon the date it is received by the trust and expenses as they are incurred by the trust. Here are some of the reporting consequences:

Investment expenses (5)—If you owned certain unit investment trusts or mortgage-backed securities, Fidelity details the investment expenses reported on Line 5. We also incorporate those expenses into the detail interest entries for Line 1 of the 1099-INT, because we are required to report unit investment trust interest before expenses have been deducted. For this reason, the reported gross interest amounts may be higher than the amounts that you actually received. In the same manner, we also incorporate your prorated share of tax-exempt interest investment expenses in detail entries for tax-exempt interest (Line 8). Tax-exempt interest dividend expenses are not included in Investment Expenses (column 5). Instead, they are listed in the Supplemental Tax-Exempt Investment Expense section which you may find near the end of your statement if there are appropriate expenses to report.

Undistributed income from a unit investment trust (UIT)—If your UIT had undistributed 2013 income, you may find it listed as a 12/31 distribution for Line 1. We report this income, even though it is undistributed. Once distributed in the following year, this income will be reported on next year's tax statement as a positive amount (since you received a distribution) and a negative amount (since it was listed on this year's tax statement as an undistributed distribution), thereby avoiding reporting the same distribution twice. Interest income from mortgage-backed securities—Following the IRS reporting requirements, we report income from mortgage-backed securities based on the record date rather than on any subsequent distribution date. As a result you may find interest, distributed by your mortgage-backed security in January or February 2014, reported as 2013 income. We list such interest in the details for Line 1, dated 12/31.

For more information, see IRS Publication 550, Investment Income and Expenses (PDF) , or consult your tax advisor.

Details of 1099-MISC Transactions

Substitute payments have been separated into two categories: those that are potentially eligible for a credit adjustment and those that are not. In early March 2014, or soon thereafter when all reclassification information is available, Fidelity expects to provide eligible customers* with a credit adjustment for substitute payments received in lieu of qualified dividends during the 2013 tax year. See Annual Credit for Substitute Payments for more information on Fidelity's credit adjustment for substitute payments in lieu of dividends, including how the credit is calculated.

You should include any credit adjustments you received in 2013 for substitute payments in lieu of qualified dividends received during the 2012 tax year in your income for 2013. We now include Form 1099-MISC, Line 3, "Other Income", previously reported in a separate statement, in this consolidated Tax Reporting Statement. Line 3 includes these adjustments, only if the total of all other income reportable to you on that line reaches the reporting threshold for that form. You may, therefore, need to consult your account statements to determine the credit adjustment amount, if any, to report on your tax return. The annual credit adjustment program is not guaranteed to remain in effect indefinitely. Fidelity reserves the right to amend or terminate the program.

Due to IRS reporting requirements governing widely held fixed investment trusts (WHFITs), if you owned certain royalty or HOLDRS trusts, Fidelity reports various expenses, as well as adjustments which affect the estimated cost basis of your shares, in the applicable supplemental sections of your tax statement. We also include your pro-rated share of each of those expenses as separate items listed as royalty income (Line 2) entries. The regulations require us to report your royalties before subtracting expenses. For this reason, the total royalty amounts reported on the form may be greater than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF) or consult your tax advisor. In addition, by March 17, additional royalty trust tax information for shareholders will be available on the Tax Statement Guides page.

*You may be eligible for the credit adjustment with respect to a substitute payment in lieu of dividends on a security on loan if (1) you are a U.S. person (including U.S. citizens and resident aliens), (2) you received the substitute payment in an account registered as an individual, joint, trust, estate, or "pass-through" entity type (partnership, LLC, LLP, etc.), (3) the account is open at the time the credit adjustment is made, and (4) you would have been eligible to treat (and report to the IRS) the dividend paid on the security on loan as a qualified dividend had the security not been on loan and had you received the dividend paid on that security rather than the substitute payment in lieu of the dividend. (You will generally satisfy this condition if the applicable security is from a domestic corporation or a qualified foreign corporation, and you would have held the security unhedged for the requisite holding period for qualified dividend treatment.) Generally, qualified dividends are those paid on shares of domestic corporations and certain eligible foreign corporations, as long as the shares are held unhedged for the requisite period of time. Fidelity reserves the right to deny the credit adjustment to any customer who Fidelity determines will be ineligible to receive the tax benefit of the reduced qualified-dividend tax rate and to amend the eligibility terms of the program.

Details of 1099-OID Transactions

Securities in the Original Issue Discount details section marked with an (A) in the "Total" column report the actual accrual information based on the purchase price of the non--real estate mortgage investment conduits (REMIC) securities. For all other securities, Fidelity uses the default from IRS Publication 1212, Guide to Original Issue Discount Instruments (PDF) to estimate the accrual amount.

If you hold collateralized debt obligations (CDO), which include real estate mortgage investment conduits (REMIC) and collateralized mortgage obligations (CMO), you may receive a separate 1099-OID form in March to report this OID. You may need to make certain adjustments to this information. Consult your tax advisor or see IRS Publication 1212, Guide to Original Issue Discount Instruments (PDF) for more specific reporting information.

Short-Term Realized Gain/Loss

Due to IRS cost basis reporting rules, certain aspects of Fidelity's cost basis reporting changed beginning with tax year 2011. 

Here is a summary of where you will find transaction information for various kinds of securities.

Type of security Location of cost basis information in your tax statement
  • Equities
  • Mutual funds and other securities in dividend reinvestment plans
  • Fixed-income securities without adjustments
  • Short sales opened in 2011–2013 and closed during 2013
1099-B only
  • Foreign equities
  • Foreign Fixed-income securities
  • Domestic Fixed-income securities with cost basis adjustments
1099-B
Additional information is also provided in the Realized Gain/Loss sections of the supplemental pages
  • Options
  • Short sales, opened prior to 2011 and closed in 2013
  • Foreign currency transactions
Realized Gain/Loss sections only

The Short-Term Realized Gain/Loss section provides information that may be helpful when completing Form 8949 and/or Form 1040, Schedule D. If this section appears on your report, refer to Help Completing Your 2013 Form 1040, Schedule D for more information.

If you purchased a security in a foreign currency, then following its sale or disposition, this section provides both the cost in that currency and the estimated United States dollar (USD) cost basis* in the "Cost Basis" column (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase). If you sold a security in a foreign currency, this section provides both the foreign currency proceeds and the USD equivalent of those foreign currency proceeds (as of the trade date of the sale) in the “Proceeds” column. See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

Note that if you sold or otherwise disposed of a debt instrument that is denominated in a currency other than USD or that makes a payment calculated by reference to the value of a currency other than USD, certain tax rules may require you to treat as ordinary income/loss all or a portion of your realized gain/loss.

Consult your tax advisor for more information regarding reporting of transactions made in a foreign currency.

Extraordinary dividends

In general, an extraordinary dividend is a dividend which exceeds 10% of your tax basis in your stock. If you received a dividend deemed as an extraordinary dividend on stock held in your account, subsequent losses realized on the sale of such stock may be treated as long-term capital losses to the extent of the extraordinary dividend regardless of how long you held the stock. If you believe you received an extraordinary dividend, you may want to consult with your tax advisor or see IRS Publication 550, Investment Income and Expenses (PDF)

* Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for your tax reporting purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

Long-Term Realized Gain/Loss

Due to IRS cost basis reporting rules, certain aspects of Fidelity's cost basis reporting have changed, beginning with tax year 2011.

Here is a summary of where you will find transaction information for various kinds of securities.

Type of security Location of cost basis information in your tax statement
  • Equities
  • Mutual funds and other securities in dividend reinvestment plans
  • Fixed-income securities without adjustments
  • Short sales opened in 2011–2013 and closed during 2013
1099-B only
  • Foreign equities
  • Foreign Fixed-income securities
  • Domestic Fixed-income securities with cost basis adjustments
1099-B
Additional information is also provided in the Realized Gain/Loss sections of the supplemental pages
  • Options
  • Short sales, opened prior to 2011 and closed in 2013
  • Foreign currency transactions
Realized Gain/Loss sections only

The Long-Term Realized Gain/Loss section provides information that may be helpful when completing Form 1040, Schedule D. If this section appears on your report, refer to Help Completing Your 2013 Form 1040, Schedule D for more information.

If you purchased a security in a foreign currency, then following its sale or disposition, this section provides both the cost in that currency and the estimated U.S. dollar (USD) cost basis* in the "Cost Basis" column (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase). If you sold a security in a foreign currency, this section provides both the foreign currency proceeds and the USD equivalent of those foreign currency proceeds (as of the trade date of the sale) in the "Proceeds" column. See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

Note that if you sold or otherwise disposed of a debt instrument that is denominated in a currency other than USD or that makes a payment calculated by reference to the value of a currency other than USD, certain tax rules may require you to treat as ordinary income/loss all or a portion of your realized gain/loss.

Consult your tax advisor for more information regarding reporting of transactions made in a foreign currency.

Extraordinary dividends

In general, an extraordinary dividend is a dividend which exceeds 10% of your tax basis in your stock. If you received a dividend deemed as an extraordinary dividend on stock held in your account, subsequent losses realized on the sale of such stock may be treated as long-term capital losses to the extent of the extraordinary dividend regardless of how long you held the stock. If you believe you received an extraordinary dividend, you may want to consult with your tax advisor or see IRS Publication 550, Investment Income and Expenses (PDF)

*Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for your tax reporting purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

Currency Realized Gain/Loss

This section of your statement provides information regarding certain transactions in which a customer disposes of foreign currency, namely exchanges of foreign currency for U.S. dollars (USD), exchanges of foreign currency for a security, and exchanges of foreign currency for a different foreign currency. It provides estimated cost basis*, proceeds, and gain/loss information for the currency disposed of in any of the foregoing transactions. Under certain tax rules, gain/loss realized on these types of transactions may be treated as ordinary income/loss.

If you originally acquired the foreign currency in exchange for USD, then the estimated cost basis we provided in this section is generally that USD purchase price. If you originally acquired the foreign currency in exchange for another foreign currency, then we determined the estimated cost basis by converting the foreign currency purchase price into USD based on exchange rates on the trade date of the purchase. If you originally acquired the foreign currency in another type of taxable transaction (e.g., as proceeds from the sale of the security or as a dividend), then we determined the estimated cost basis by converting the foreign currency into USD based on exchange rates on the date of that earlier transaction.

If you sold the currency in exchange for USD, then the proceeds in this section are those USD proceeds. If you used the foreign currency to purchase a security or another foreign currency, then we determined the proceeds by converting the disposed currency into USD based on exchange rates on the trade date of that transaction. For tax reporting purposes, you may be required to determine your actual USD cost basis, proceeds, and gain/loss based on the exchange rates on the settlement dates of the applicable transactions. Gains or losses from these types of currency transactions are generally reportable as ordinary income on Form 1040.

See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

* Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for your tax reporting purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.
The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Fidelity makes no warranties with regard to such information or results obtained by its use. Fidelity disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Before using the Fidelity Tax Center, review important legal information and terms of use applicable to products, services, and/or information provided by, or accessed through, the Tax Center by the following companies:ions made as a result of, or any tax position taken in reliance on information provided pursuant to, your use) of these Wolters Kluwer software products or the information or content furnished by Wolters Kluwer.

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See Intuit’s terms of service.

GainsKeeper®
The use of GainsKeeper branded products is governed by Wolters Kluwer Financial Services (Wolters Kluwer) applicable license agreements. GainsKeeper and the GainsKeeper logo are registered trademarks and/or service marks of Wolters Kluwer. Wolters Kluwer is not affiliated with Fidelity Brokerage Services (FBS) or their affiliates. Wolters Kluwer is solely responsible for the information, content and software products provided by it. Fidelity does not explicitly or implicitly endorse or approve such information, content or products. Fidelity cannot guarantee that such information and content supplied is accurate, complete, or timely, or that the software products provided produce accurate and/or complete results. Fidelity does not make any warranties with regard to the information, content or software products or the results obtained by their use. Fidelity disclaims any liability arising out of your use (or the results obtained from, interpretations made as a result of, or any tax position taken in reliance on information provided pursuant to, your use) of these Wolters Kluwer software products or the information or content furnished by Wolters Kluwer.

TradeLog®
The use of TradeLog branded products is governed by Armen Computing Ltd. (Armen) applicable license agreements. TradeLog and the TradeLog logo are registered trademarks and/or service marks of Amren. Armen is not affiliated with Fidelity Brokerage Services (FBS) or their affiliates. Armen is solely responsible for the information, content and software products provided by it. Fidelity does not explicitly or implicitly endorse or approve such information, content or products. Fidelity cannot guarantee that such information and content supplied is accurate, complete, or timely, or that the software products provided produce accurate and/or complete results. Fidelity does not make any warranties with regard to the information, content or software products or the results obtained by their use. Fidelity disclaims any liability arising out of your use (or the results obtained from, interpretations made as a result of, or any tax position taken in reliance on information provided pursuant to, your use) of these Armen software products or the information or content furnished by Armen.

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