Publication 550 - Introductory Material

Future Developments

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What's New

Form 1099-B. Form 1099-B has been redesigned so that the information is reported in boxes that are numbered to match the corresponding line and column on Form 8949. A new box has also been added at the top of Form 1099-B to tell you which box to check when completing Form 8949. These changes will make it easier for you to complete Form 8949. A Form 1099-B (or substitute statement) for transactions involving certain types of debt instruments acquired after 2013 will have more detailed information than a Form 1099-B for transactions involving debt instruments acquired before 2014. This is also true for a Form 1099-B for options granted or acquired after 2013 or securities futures contracts entered into after 2013. This additional information will help you complete Form 8949 and Schedule D.


Net investment income tax (NIIT). Beginning in 2013, you may be subject to the NIIT. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts. See Net investment income tax (NIIT) , later.

Mutual fund distributions. Publication 564, Mutual Fund Distributions, has been incorporated into this publication.

Foreign source income. If you are a U.S. citizen with investment income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt by U.S. law. This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer.

Employee stock options. If you received an option to buy or sell stock or other property as payment for your services, see Publication 525, Taxable and Nontaxable Income, for the special tax rules that apply.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.


This publication provides information on the tax treatment of investment income and expenses. It includes information on the tax treatment of investment income and expenses for individual shareholders of mutual funds or other regulated investment companies, such as money market funds. It explains what investment income is taxable and what investment expenses are deductible. It explains when and how to show these items on your tax return. It also explains how to determine and report gains and losses on the disposition of investment property and provides information on property trades and tax shelters.

The glossary at the end of this publication defines many of the terms used.

Investment income.   This generally includes interest, dividends, capital gains, and other types of distributions including mutual fund distributions.

Investment expenses.   These include interest paid or incurred to acquire investment property and expenses to manage or collect income from investment property.

Qualified retirement plans and IRAs.   The rules in this publication do not apply to investments held in individual retirement arrangements (IRAs), section 401(k) plans, and other qualified retirement plans. The tax rules that apply to retirement plan distributions are explained in the following publications.
  • Publication 560, Retirement Plans for Small Business.

  • Publication 571, Tax-Sheltered Annuity Plans.

  • Publication 575, Pension and Annuity Income.

  • Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

  • Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs).

  • Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits.


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