J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

Chapter 4

Dividend and Interest Income

Dividends and interest that are paid to you in 2012 are reported by the payer to the IRS on Forms 1099.

You will receive copies of:

• Forms 1099-DIV, for dividends
• Forms 1099-INT, for interest
• Forms 1099-OID, for original issue discount

Dividends paid by most domestic corporations and many foreign corporations are subject to the same preferential tax rates as net long-term capital gains (4.2).

Report the amounts shown on the Forms 1099 on your tax return. The IRS uses the Forms 1099 to check the income you report. If you fail to report income reported on Forms 1099, you will receive a statement asking for an explanation and a bill for the tax deficiency. If you receive a Form 1099 that you believe is incorrect, contact the payer for a corrected form.

Do not attach your copies of Forms 1099 to your return. Keep them with a copy of your tax return.

4.1 Reporting Dividends and Mutual-Fund Distributions

4.2 Qualified Corporate Dividends Taxed at Favorable Capital Gain Rates

4.3 Dividends From a Partnership, S Corporation, Estate, or Trust

4.4 Real Estate Investment Trust (REIT) Dividends

4.5 Taxable Dividends of Earnings and Profits

4.6 Stock Dividends on Common Stock

4.7 Dividends Paid in Property

4.8 Taxable Stock Dividends

4.9 Who Reports the Dividends

4.10 Year Dividends Are Reported

4.11 Distribution Not Out of Earnings: Return of Capital

4.12 Reporting Interest on Your Tax Return

4.13 Interest on Frozen Accounts Not Taxed