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Publication 550

How To Report Dividend Income(p23)


Words you may need to know (see Glossary)

Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Report qualified dividends on line 9b.
If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. See Capital gain distributions, later. If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. You cannot use Form 1040EZ if you receive any dividend income other than Alaska Permanent Fund dividends.

Form 1099-DIV.(p23)

If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Even if you do not receive a Form 1099-DIV, you must report all your dividend income.
See Form 1099-DIV and its instructions for more information on how to report dividend income.

Form 1040A or Form 1040.(p23)

You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III.
List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. If your securities are held by a brokerage firm (in "street name"), list the name of the brokerage firm shown on Form 1099-DIV as the payer. If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited.
Enter on line 6 the total of the amounts listed on line 5. (However, if you hold stock as a nominee, see Nominees, later.) Also enter this total on line 9a of Form 1040A or 1040.

Dividends received on restricted stock.(p23)

Restricted stock is stock you get from your employer for services you perform and that is nontransferable and subject to a substantial risk of forfeiture. You do not have to include the value of the stock in your income when you receive it. However, if you get dividends on restricted stock, you must include them in your income as wages, not dividends. See Restricted Property in Pub. 525 for information on restricted stock dividends.
Your employer should include these dividends in the wages shown on your Form W-2, Wage and Tax Statement. If you also get a Form 1099-DIV for these dividends, list them on Schedule B (Form 1040A or 1040), line 5, with the other dividends you received. Enter a subtotal of all your dividend income several lines above line 6. Below the subtotal, enter "Dividends on restricted stock reported as wages on Form 1040 (or Form 1040A), line 7," and enter the dividends included in your wages on line 7 of Form 1040 or Form 1040A. Subtract this amount from the subtotal and enter the result on line 6.
You can choose to include the value of restricted stock in gross income as pay for services. If you make this choice, report the dividends on the stock like any other dividends. List them on Part II, line 5, of Schedule B (Form 1040A or 1040), along with your other dividends (if the amount of ordinary dividends received from all sources is more than $1,500). If you receive both a Form 1099-DIV and a Form W-2 showing these dividends, do not include the dividends in your wages reported on line 7 of Form 1040 or Form 1040A. Attach a statement to your Form 1040 or Form 1040A explaining why the amount shown on line 7 of your Form 1040 or Form 1040A is different from the amount shown on your Form W-2.
Independent contractor.(p24)
If you received restricted stock for services as an independent contractor, the rules in the previous discussion apply. Generally, you must treat dividends you receive on the stock as income from self-employment.

Qualified dividends.(p24)

Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. The amount in box 1b is already included in box 1a. Do not add the amount in box 1b to, or subtract it from, the amount in box 1a. Do not include any of the following on line 9b.
If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Enter qualified dividends on line 2 of the worksheet.
Investment interest deducted.(p24)
If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. For more information about the limit on investment interest, see Interest Expenses in chapter 3.

Capital gain distributions.(p24)

If you received capital gain distributions, you report them directly on Form 1040A, line 10, Form 1040, line 13, or on Schedule D (Form 1040), line 13, depending on your situation. Distributions of net realized short-term capital gains are not treated as capital gains. Instead, they are included on Form 1099-DIV as ordinary dividends. Report them on your tax return as ordinary dividends.

Exceptions to filing Form 8949 and Schedule D (Form 1040).(p24)

There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040).
Exception 1.(p24)
You do not have to file Form 8949 or Schedule D (Form 1040) if you have no capital losses and your only capital gains are capital gain distributions from Form(s) 1099-DIV, box 2a. (If any Form(s) 1099-DIV you receive have an amount in box 2b (unrecaptured section 1250 gain), box 2c (section 1202 gain), or box 2d (collectibles (28%) gain), you do not qualify for this exception.) If you qualify for this exception, report your capital gain distributions directly on line 13 of Form 1040 (and check the box on line 13). Also use the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 instructions to figure your tax. You can report your capital gain distributions on line 10 of Form 1040A, instead of on Form 1040, if you do not have to file Form 1040.
Exception 2.(p24)
You must file Schedule D (Form 1040), but generally do not have to file Form 8949, if Exception 1 does not apply and your only capital gains and losses are:
Undistributed capital gains.(p24)
To report undistributed capital gains, you must complete Schedule D (Form 1040) and attach it to your return. Report these gains on Schedule D (Form 1040), line 11, column (h), and attach Copy B of Form 2439 to your return. Report the tax paid by the mutual fund on these gains on Form 1040, line 73, and check box a on that line.
The mutual fund (or other regulated investment company) or real estate investment trust (REIT) making the distribution should tell you how much of it is: For information about these terms, see Capital Gain Tax Rates in chapter 4.
Enter on line 11 of the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions the part reported to you as unrecaptured section 1250 gain. If you have a gain on qualified small business stock (section 1202 gain), follow the reporting instructions under Section 1202 Exclusion in chapter 4.

Nondividend distributions.(p24)

Report nondividend distributions (box 3 of Form 1099-DIV) only after your basis in the stock has been reduced to zero. After the basis of your stock has been reduced to zero, you must show this excess amount in Form 8949, Part I, if you held the stock 1 year or less. Show it in Form 8949, Part II, if you held the stock for more than 1 year. Enter the name of the company in column (a) of Form 8949. Report the amount of the excess distribution in column (d) and your zero basis in column (e) of Form 8949.
Report these transactions on Form 8949 with the correct box checked.
For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 4. Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040).


If you received ordinary dividends as a nominee (that is, the dividends are in your name but actually belong to someone else), include them on line 5 of Schedule B (Form 1040A or 1040). Several lines above line 6, put a subtotal of all dividend income listed on line 5. Below this subtotal, enter "Nominee Distribution" and show the amount received as a nominee. Subtract the total of your nominee distributions from the subtotal. Enter the result on line 6.
If you received a capital gain distribution or were allocated an undistributed capital gain as a nominee, report only the amount that belongs to you on Form 1040A, line 10; Form 1040, line 13; or Schedule D (Form 1040), line 13, whichever is appropriate. Attach a statement to your return showing the full amount you received or were allocated and the amount you received or were allocated as a nominee.
File Form 1099-DIV with the IRS.(p24)
If you received dividends as a nominee in 2015, you must file a Form 1099-DIV (or Form 2439) for those dividends with the IRS. Send the Form 1099-DIV with a Form 1096 to your Internal Revenue Service Center by February 29, 2016 (March 31, 2016, if you file Form 1099-DIV electronically). Give the actual owner of the dividends Copy B of the Form 1099-DIV by February 1, 2016. On Form 1099-DIV, you should be listed as the "Payer." The other owner should be listed as the "Recipient." You do not, however, have to file a Form 1099-DIV to show payments for your spouse. For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns and the Instructions for Form 2439.

Liquidating distributions.(p25)

If you receive a liquidating distribution on stock, the corporation will give you a Form 1099-DIV showing the liquidating distribution in boxes 8 and 9.