Proceeds from Redemption or Exchange of Securities
All redemptions (sales) or exchanges made in non-retirement mutual fund accounts, except money market accounts, must be reported on Form 1099-B. Form 1099-B reports the gross proceeds from the sale or exchange of your mutual fund shares in 2012. If you redeemed or exchanged shares in the Domini Social Equity Fund, Domini International Social Equity Fund, or Domini Social Bond Fund during 2012, you will receive a Form 1099-B.
If you have one of the following types of accounts, you will not receive Form 1099-B:
-
Individual Retirement Accounts and other tax-deferred accounts (including Roth and Traditional IRAs, Rollover IRAs, SEP and SIMPLE IRAs, Coverdell Education Savings Accounts and qualified tuition plan accounts)
-
Accounts owned by corporations, certified nonresident aliens and certain tax-exempt organizations
Effective tax year 2012, Form 1099-B will also report cost basis information for your mutual fund redemption(s), if available. The layout of Form 1099-B has changed significantly, and information is now broken out into the following five sections based on the categorization of the redemption and the cost basis information available:
Section 1: Short-Term Transactions for which Basis Is Reported to the IRS. If information is reported in this section, the portion of the redemption is categorized as a short-term capital gain. The cost basis information listed in boxes 3, 5 and 6a will be reported to the IRS. This information should be reported on Form 8949 where further adjustments may be made, if necessary.
Section 2: Short-Term Transactions for which Basis Is Not Reported to the IRS. If information is reported in this section, the portion of the redemption is categorized as a short-term capital gain. The cost basis information listed in boxes 3, 5 and 6a will not be reported to the IRS. This information can be used as a guide to help determine your cost basis.
Section 3: Long-Term Transactions for which Basis Is Reported to the IRS. If information is reported in this section, the portion of the redemption is categorized as a long-term capital gain. The cost basis information listed in boxes 3, 5 and 6a will be reported to the IRS. This information should be reported on Form 8949 where further adjustments may be made, if necessary.
Section 4: Long-Term Transactions for which Basis Is Not Reported to the IRS. If information is reported in this section, the portion of the redemption is categorized as a long-term capital gain. The cost basis information listed in boxes 3, 5 and 6a will not be reported to the IRS. This information can be used as a guide to help determine your cost basis.
Section 5: Transactions for which Basis Is Not Reported to the IRS and for Which Short- or Long-Term Determination is Unknown. If information is reported in this section, there is not enough information available to determine the cost basis for your redemption or exchange.
For more information on Form 8949, click here [1]. Please consult your tax advisor for advice on the cost basis information needed for Form 8949 and Schedule D.
The information on your Form 1099-B is reported to the IRS.
Please consult a professional advisor as necessary for guidance on reporting the information from Form 1099-B on your tax return, and for tax, legal and investment advice.
This information is intended for general informational purposes only. It is not meant to be a substitute for professional tax advice. Please consult a professional advisor to determine your individual tax situation and for tax, legal, and investment advice. The information set forth above concerns only federal income tax, not state or local income tax, except where specifically noted.
Please refer to the Instructions for Recipients on the back of your income tax forms. Please also refer to IRS Publication 564, Mutual Fund Distributions, and IRS Publication 590, Individual Retirement Arrangements (IRAs) available at www.irs.gov or by calling the IRS at 1-800-TAX-FORM (1-800-829-3676).