Form 1099-DIV

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Definition of 'Form 1099-DIV'

A Form 1099-DIV is a tax document that reports distributions from stocks, bonds, mutual funds, and other investments. It is issued by the payer of the distribution, such as a brokerage firm or mutual fund company. The form includes information such as the amount of the distribution, the type of investment, and the payer's identification number.

The 1099-DIV is used to report income from investments to the IRS. Investors must report the income on their tax return. The amount of income reported on the 1099-DIV will depend on the type of investment. For example, dividends from stocks are taxed at the ordinary income tax rate, while capital gains from the sale of stocks are taxed at a lower rate.

The 1099-DIV is also used to report capital gains distributions from mutual funds. Capital gains distributions are taxed at the same rate as long-term capital gains, which is currently 0%, 15%, or 20%, depending on the investor's income.

If you receive a Form 1099-DIV, you should keep it for your records. You will need it when you file your tax return.

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