Year of dividend for tax purposes

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Topic Author
red5
Posts: 798
Joined: Sun Apr 01, 2012 4:42 pm

Year of dividend for tax purposes

Post by red5 »

Hello folks. I came across a situation I hadn't expected. Last year I changed all my distribution elections from reinvesting to receiving in my settlement account [bond fund VFICX at Vanguard].

Before I would receive and reinvest bond mutual fund dividends on the last business day of the month. Now I receive the dividend in my settlement fund on what seems to be the first business day of the next month. Thus I received my December dividend on January 2, 2018.

My "Dividends and Capital Gains distributions" page included those January 2 dividends for 2018.

However my 1099-DIV includes them for 2017.

So I'm wondering why the discrepency? I get that they were "earned" in December of 2017 and that's probably why they are included on my 1099-DIV for 2017 (right?). Basically I just want to know that the 1099-DIV is correct and that the dividend received January 2 counts as 2017 income.
livesoft
Posts: 86080
Joined: Thu Mar 01, 2007 7:00 pm

Re: Year of dividend for tax purposes

Post by livesoft »

Those are the IRS rules. See for example:
https://www.google.com/search?q=dividen ... ry+irs.gov
irs.gov wrote:If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. You report the dividend in the year it was declared.
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Topic Author
red5
Posts: 798
Joined: Sun Apr 01, 2012 4:42 pm

Re: Year of dividend for tax purposes

Post by red5 »

Thank you, I appreciate your time.
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