- quote -

Probably. Wait and see how the broker reports it on the
1099-B that they send you. However it appears on the 1099-B,
that's how you report it on your tax return.

- quote -

Yes. However, depending on when previous distributions were
paid, it's possible that not all of the shares you sold on
Friday are long-term. There may have been some shares that
were purchased with reinvested dividends less than a year
before the sale. If that's the case, you will have to split
the Friday sale and report it in two pieces, the long-term
part and the short-term part (which would still be separate
from the fractional share you sold on Monday). The broker
may send you a statement showing the breakdown between
long-term and short-term.

- quote -

No.

- quote -

Yes. And if you do, then you must also use average basis for
the fractional share. However, you said:

- quote -

If you never sold any shares of this fund before, and you
sold all the shares you owned in (essentially) one
transaction, there isn't going to be any significant
difference between average basis and actual cost. If it
weren't for the fractional share there would be no
difference at all.

Bob Sandler

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"nickname" <jhmiller001[at]gmail.com> wrote:

- quote -

Almost. Since you apparently were automatically reinvesting
your dividends, you will have to check if there were any
other reinvested distributions within one year of your
Friday sale date. Any shares purchased one year or less
before the sale date would generate a short-term gain (or
loss). Those shares purchased more than one year before the
Friday sale date would generate long-term gain/loss. The
Monday sale of the fractional share will generate a second
(or third) sale transaction (short-term).

Ira Smilovitz

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"nickname" <jhmiller001[at]gmail.com> wrote:

- quote -

Yes.

- quote -

It could be a combination of both, depending on when your
previous reinvested distributions were. Any shares that
were purchased using disitributions in the year leading up
to your sale would be sold short-term. All the original
shares and older reinvested shares are long-term. If you
haven't had any reinvested distributions in the previous
year then they would all be long-term.

- quote -

Wash sale rules only apply if you sell at a loss. Also, if
you completely dispose of all shares within the same tax
year, there's no tax implication of the wash sale rules (the
disallowed loss is added to the cost basis of remaining
shares, and when you sell them it cancels out).

- quote -

Yes, you can still use the average cost method of cost basis
determination.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

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"nickname" <jhmiller001[at]gmail.com> wrote

- quote -

Yes, most likely.

- quote -

Yes.

- quote -

There may be some portion of the mutual fund (sold on
Friday) that contains short term investments.

- quote -

Not if you are out of that fund as of the end of the year -
and for 30 days after that.

- quote -

I probably would use the numbers provided by the fund for
cost basis, unless you believe them to be wrong.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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- quote -

The safest way to minimize audits is to put a transaction
line on schedule D for every line on your 1099(s). So if
they report two transactions, you enter two transactions.
Federal and state tax agencies try to match 1099s to
schedule Ds.

Also it is likely your 1099 form will break out the
categories for long term, wash, gains, dividends etc. The
two most popular tax programs seamlessly convert these 1099s
into schedule Ds. Its well worth the $0-$20 for one of these
programs just get schedule D right.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

- quote -

The safest way to minimize audits is to put a transaction
line on schedule D for every line on your 1099(s). So if
they report two transactions, you enter two transactions.
Federal and state tax agencies try to match 1099s to
schedule Ds.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I had a question about a dividend reinvestment for a mutual
fund that I was hoping someone could help me with. I
purchased a mutual fund a few years back and intended to
sell all the shares of the mutual fund on a Friday. As it
turns out, the sale date also happened to be a dividend
distribution date. As such, all the shares were sold as
directed and then on Saturday, the account had a fractional
share worth approx $10. Talking to the broker, they
recommended that I sell those fractional shares on the
following Monday at no cost to me.

My question is how to report this on my income taxes? Would
they be considered two separate transactions? Would the
sale of the fractional share be listed as a short term sale
and the sale of the bulk of the mutual fund as a long term
sale? Am I going to run into any wash sale rules? Can I
still use the mutual fund average cost techniques for the
sale of the bulk of the mutual fund? Any help would be much
appreciated. This is my first mutual fund sale

Thanks!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >