| Tax Treatment of Capital Gains |
|
If the securities were held by the fund for at least a year, the gain will be taxed at the lower capital gains tax rate and identified as long-term gains on your Form 1099-DIV, which you will receive from the fund in late January. Distributions of dividends, income, and capital gains held less than a year are taxed as ordinary income and are reported as "dividend income" on your tax return.
Back To Top
Because the gains relate to the securities owned by the fund, a distribution of long-term gains by the fund is subject to long-term capital gains tax rates, even if you held the shares for less than a year.
Back To Top
Yes. Distributions of dividends and capital gains are subject to income tax regardless of whether you receive them in cash or reinvest them in additional shares.
Back To Top
In January, the fund will send you a Form 1099-DIV identifying all the distributions paid to you during the tax year, and it will show a breakdown between ordinary income dividends and long-term capital gains distributions.
Back To Top
Since short-term capital gains are usually taxed the same as taxable dividends, the IRS prefers that both amounts appear on the same Form 1099-DIV. A complete itemized listing of short-term capital gains and dividends can be found on your year-end account statement.
Your capital gains will be confirmed on your 1099-DIV, which will be mailed to you in late January. Neither Prudential nor its sales professionals render tax or legal advice. Please consult with your attorney, accountant and/or tax professional for advice concerning your particular situation.
Back To Top
|
|
 |
|
Printer Friendly Version