Accessibility Skip to Top Navigation Skip to Main Content Home  |  Change Text Size  |  Contact IRS  |  About IRS  |  Site Map  |  Español  |  Help  

Publication 564 - Introductory Material

Table of Contents

What's New

Maximum tax rate on qualified dividends and net capital gain reduced. Beginning in 2008, the 5% maximum tax rate on qualified dividends and net capital gain (the excess of net long-term capital gain over net short-term capital loss) is reduced to 0 (zero)%. This reduction applies for both regular and alternative minimum tax. The 15% maximum tax rate on qualified dividends and net capital gain has not changed.

Reminder

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.

Introduction

This publication provides federal income tax information for individual shareholders of mutual funds or other regulated investment companies, including money market funds. It explains how to report distributions paid to you by a mutual fund and any expenses connected with your investment. In addition, it explains how to report undistributed long-term capital gains. It also explains how to figure and report your gain or loss when you sell, exchange, or redeem your mutual fund shares. A comprehensive example, with filled-in forms, appears at the end of the publication.

In this publication, the term “mutual fund” means a mutual fund or other regulated investment company.

Mutual fund.   A mutual fund is a regulated investment company generally created by “pooling” funds of investors to allow them to take advantage of a diversity of investments and professional management.

Money market fund.    A money market fund is a mutual fund that tries to increase current income available to shareholders by buying short-term market investments.

  Money market funds pay dividends and should not be confused with bank money market accounts that pay interest.

Qualified retirement plans and IRAs.   The rules in this publication do not apply to mutual fund shares held in individual retirement arrangements (IRAs), section 401(k) plans, and other qualified retirement plans. The value of the mutual fund shares and earnings allocated to you are included in your retirement plan assets and stay tax free generally until the plan distributes them to you. The tax rules that apply to retirement plan distributions are explained in the following publications.

  • Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans).

  • Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans).

  • Publication 575, Pension and Annuity Income.

  • Publication 590, Individual Retirement Arrangements (IRAs).

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

  

Comments and suggestions.   We welcome your comments about this publication and your suggestions for future editions.

  You can write to us at the following address:


Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  You can email us at *taxforms@irs.gov. (The asterisk must be included in the address.) Please put “Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications.   Visit www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.


Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613

Tax questions.   If you have a tax question, check the information available on www.irs.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

Useful Items - You may want to see:

Publication

  • 550 Investment Income and Expenses

Form (and Instructions)

  • Schedule B (Form 1040) Interest and Ordinary Dividends

  • Schedule D (Form 1040) Capital Gains and Losses

  • Schedule 1 (Form 1040A) Interest and Ordinary Dividends for Form 1040A Filers

  • 1099-B Proceeds From Broker and Barter Exchange Transactions

  • 1099-DIV Dividends and Distributions

  • 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains

  • 4952 Investment Interest Expense Deduction

See How To Get Tax Help near the end of this publication for information about getting these publications and forms.

Prev  Up  Next
  Home  

More Online Publications