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The Tax Information page displays a summary of tax and realized gain/loss information updated daily for brokerage and mutual fund accounts that are 1099-reportable. You can view a summary and all related details for a selected tax year. In addition to the tax and gain/loss information, you can also review the totals for margin interest paid, non-reportable option sales, and return of principal.
The reported tax information may not reflect all adjustments necessary for tax reporting purposes and may not be appropriate for use in preparing a tax return. You should use the official tax forms that Fidelity sends by mail for purposes of tax return preparation.
Mutual fund distributions are taxable based on the record date of the distribution. For example, mutual fund distributions declared as payable to shareholders of record in December, and paid in January, are taxable as of the December tax year. These distributions are not included in the December account statement, but do appear in the January account statement when the dividends are paid and are reflected as income in December here. In addition, these distributions would be reported on Form 1099-DIV for the December tax year.
Dividend information is based on information known to Fidelity as of the date listed. Adjustments and reclasses may occur through the early part of the subsequent tax year as additional information is made available. As new information becomes available updates are included online and on Form 1099-DIV. As a result, the tax information included online and on Form 1099-DIV may differ from information previously reported on account statements and/or the year-end Investment Report.
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.
Tax reporting of OID obligations is complex; if you paid acquisition or bond premium, or if the obligation is a stripped bond or stripped coupon, you must compute the proper amount of OID. Fidelity generally makes OID adjustments to your basis in OID obligations in the Realized Gain/Loss sections of the Fidelity Tax Reporting Statement. If you must compute your proper OID, refer to IRS Publication 1212, Guide to Original Issue Discount (OID) Instruments, to figure the correct OID.
A return of principal is the partial repayment of a debt obligation by the borrower. A return of principal is a recovery of basis and may result in a capital gain or loss or realized market discount. Fidelity is not required to report this information to the IRS.
As noted on the View Lots page, some figures may be adjusted due to previous wash sale disallowed loss. If you sell shares at a loss and you purchase additional shares of a substantially identical security 30 days before or after the sale (within a 61-day window), the purchase may result in the loss being deferred until you sell the newly purchased shares under the "wash sale" provisions of the Internal Revenue Code.
Tax-exempt income refers to interest from municipal bonds as well as distributions from mutual funds that qualify as exempt interest dividends and are generally not taxable for regular federal income tax purposes. Fidelity is required to report this information to the IRS, and may be required to report the information to California or other state tax authorities. The total amount or a portion of tax-exempt income (reported as Specified Private Activity Bond Interest) must be taken into account in computing the federal alternative minimum tax applicable to individuals, and may be subject to state and local taxes. You are required to report tax-exempt income on Form 1040, and may be required to report it on your state tax return as well.
Fixed income securities acquired at a market discount are generally purchased on the secondary market at less than the stated redemption price, or in the case of OID securities, purchased on the secondary market at less than the adjusted issue price. Market discount is generally the amount of the stated redemption price (or the OID-adjusted issue price) that is more than basis in the bond immediately after you acquire it on the secondary market. Under federal tax rules, market discount that is less than 0.25% of the stated redemption price (or OID-adjusted issue price) of the bond multiplied by the number of full years to maturity remaining at acquisition is treated as zero.
There are various rules and elections available for the treatment of market discount on your return, each of which may result in a different tax result. These rules only apply to fixed income securities issued with more than one year to maturity. Fidelity's calculation of realized market discount income assumes you elected to defer recognizing the market discount until the sale (or other disposition) of the security, and assumes you elected to use the constant yield method from acquisition date through disposition date. Under this election, no market discount is recognized if the bond is sold at a loss. Other elections available under tax laws may be more beneficial, depending on your individual tax situation. For Federal tax purposes, market discount income from both taxable and tax-exempt bonds is treated as taxable interest income.
Acquiring securities issued with one year or less to maturity at a discount may result in an acquisition discount. Different rules apply to the treatment of a gain or loss for these securities.
Consult your tax advisor and IRS Publication 550, Investment Income and Expenses for additional information.
Premium generally arises when a fixed income security is purchased for an amount greater than the total of all amounts payable on the bond other than qualified stated interest. According to federal tax rules, if you acquired your fixed income security at a premium and make the required elections when you file your return, the premium is amortized annually using the constant yield method (also called the yield to maturity method) with semi-annual compounding. If you did not make the required elections, your gain or loss is the difference between your purchase price (as adjusted for wash sales and other required adjustments, if any) and your proceeds at disposition, making no premium adjustments. These rules apply to securities issued at par and to OID securities acquired on the secondary market at price greater than their maturity value. Fidelity calculates amortized premium (and makes corresponding adjustments to the cost basis it provides) using the yield-to-maturity method. For tax-exempt securities, amortization of premium is required and is not deductible from taxable income. For taxable bonds, a tax election may be required in order to amortize premium, and the current year's amortized premium may be deductible from taxable income. The amortized premium amounts and adjusted cost basis Fidelity provides may not reflect all adjustments necessary for tax reporting purposes. It may not be applicable if you have not made an appropriate tax election or if you are using an alternative amortization calculation method. Review prior adjustments that you have made, and consult your tax advisor and IRS Publication 550, Investment Income and Expenses, for additional information.
When fixed income securities issued with original issue discount (OID) are purchased at a premium over the adjusted issue price (plus any accreted OID income), the premium, called an acquisition premium, must be amortized and reflected in the calculation of the adjusted cost basis. This amortization will impact the taxable income you will recognize each year. Fidelity calculates acquisition premium amortization (and makes corresponding adjustments to adjusted cost basis it provides) on the assumption that you elected to use the ratable accrual method in which OID income is reduced by the pro-rata portion of the acquisition premium attributable to each year's OID earned. If you elected an alternative amortization calculation method, the acquisition premium amount Fidelity calculates may not be applicable. The acquisition premium amounts and adjusted cost basis Fidelity provides may not reflect all adjustments for tax reporting purposes. Review prior calculations and adjustments you have made and consult your tax advisor and IRS Publication 550, Investment Income and Expenses, for additional information.
No. Fidelity does not provide amortization, accretion, and similar calculations (or corresponding adjustments to cost basis) for certain fixed income securities (and some bond-like equities), such as short-term instruments, Investment Unit Trusts, foreign fixed income securities, or those that are subject to early prepayment of principal (pay downs).
Fidelity provides an estimate of the ordinary income/loss recognized from dispositions of contingent payment instruments based on the adjusted cost basis information in its records. Under IRS regulations, gain (if any) on disposition of a contingent payment debt instrument is usually treated as ordinary income. Any loss, to the extent that the loss is less than or equal to previously earned interest, is usually treated as an ordinary loss. Any loss greater than previously earned interest is usually treated as a capital loss.