| Every investor looks forward to gaining some | | | | investors appropriately. |
| income from every investment that they put | | | | Capital gains are also taxable and this is done as |
| their money into. Mutual funds are among the | | | | though they were long term investments |
| investments that many people want to | | | | regardless of how long the investor has owned |
| understand, especially how their dividends and | | | | them. Once the dividends and capital gains have |
| capital gains are distributed. Depending on the | | | | been distributed, they must be reported on form |
| issuing company, these gains can be distributed on | | | | 1099-DIV. This is required by law and as such, |
| a particular time of the year. The dividends are | | | | you should be aware that the distributions create |
| derived from the interest gained on the securities | | | | a personal tax obligation to you as the investor. |
| within the funds portfolio. | | | | The distribution may be made at different times |
| Many fund managers pay out dividends to the | | | | of the year and as such are classified accordingly. |
| investors, while others may decide to reinvest | | | | For example, there is the estimated Year-End |
| that income into the fund and pay out a higher | | | | distribution which is payable at the end of the |
| return later. Sometimes the amount paid out may | | | | current calendar year. They amount to be given |
| be less than what an investor expects, and on | | | | out is normally subject to change and are given |
| this note, it is important to be aware that some | | | | to a selected number of funds. The Ex. Date or |
| returns are taxable. Capital gains on the other | | | | Ex-Dividend Date is the date when the amount |
| hand are those reports that are made on | | | | distributed is deducted from the funds net asset |
| securities that have been held in the fund for | | | | value per share. Final Year End is the actual |
| more than one year. All those securities must be | | | | distributions that have been declared and paid out |
| sold off and the losses or profits reported to the | | | | by the end of the year. |