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Step 1
Contact your mutual fund company if you do not receive Form 1099-DIV by the end of February for the prior year.
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Step 2
Check Form 1099-DIV to see if capital gains were distributed. Amounts shown in Box 2a are capital gain distributions you must report on Schedule D of your tax return.
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Step 3
Report capital gain distributions on Schedule D line 13. If there aren't other items to report on Schedule D, you can report the gain distributions directly on Form 1040 line 13 and disregard Schedule D.
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Step 4
Review Form 2439 if there were taxable undistributed capital gains during the year. Form 2439 also shows the tax amounts allocated to you which you can claim as a tax credit.
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Step 5
Attach Copy B of Form 2439 to your income tax return to show the tax that was allocated to you and which you are claiming as a tax credit. Retain Copy C of Form 2439 for your tax file.
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Step 6
Increase the tax cost basis of your mutual fund shares by the amount of the undistributed gains reported in income to eliminate double taxation of those amounts.






