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How to Report Capital Gain Distributions

Capital gain distributions occur when a mutual fund:

  • Sells assets for more than their cost, and

  • Distributes the realized capital gains to the fund's shareholders

Payers report capital gain distributions on box 2a of Form 1099-DIV.

Interview Tip

Capital gain distributions are also called capital gain dividends.

Frequently Asked Questions

Question: Are capital gains and capital gain distributions the same thing?

Answer: No. A capital gain occurs when the owner of a mutual fund (or capital asset) sells shares in the fund (or property) for more than the cost and realizes a profit.

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