Use this page to enter dividend, interest and tax-free interest, return of capital, short-term capital gain, medium-term capital gain, long-term capital gain, or 5-year capital gain received by the club.
What You Need to Know
All cash distributions, except return of capital, are taxable in the year in which you receive them. Return of capital is a return of money invested and on which the members have already paid tax. Medium-term capital gain applies only to distributions received in 1997.
How to Enter the Cash Distribution / Dividend
Select the date, and the ex-dividend date for the transaction. The ex-dividend date is the earliest date on which a club can sell a stock paying a dividend and still receive that dividend. The ex-dividend date is two trading days before the record date and typically between two and five weeks before the payment (transaction) date. If you are not sure of the ex-dividend date, click the Find it link under the box to open a new window showing the Stock Quotes/Information page.
Changes to the tax laws in JGTRRA of 2003 define certain dividends as "qualifying" for lower tax rates if you own the shares for more than 60 days in the window starting 60 days before the ex-dividend date and ending 121 days later.
Generally, the only time that the ex-dividend date will be important is when the qualifying window extends beyond the end of the calendar year. In most other situations, the dates of buy and sell transactions (or the absence of any sale) will allow determination of qualifying status.
Select the symbol of the stock in question, and enter the amount of the dividend.
Enter the amount of the dividend. If you paid foreign taxes out of a dividend, make sure the amount you enter here is the Gross (pre-tax) amount of the dividend on this page, in addition to the Foreign Tax.
If the dividend was for a Foreign stock, you can enter the amount of Foreign tax on this page. If you enter the amount here, you *do not* need to use the separate foreign tax transaction under Accounting > Securities. Also keep in mind when entering the foreign tax, the amount *does not* need to be negative.
Most of the time, the Type menu can be left on the default selection of 'Dividend'. If you have a mutual fund, REIT, or other stock that reclassifies dividends at the end of the year, you may need to change this to a different selection:
NOTE: If you do have to adjust a dividend that was reclassified, you can click the add another type link, and the page will add another set of Type, Amount and Foreign Tax boxes. This can be used if a transaction originally listed as a simple dividend is latter re-classified and split into a regular dividend and a capital gain, for example. If you use this, make sure that you also reduce the amount of the original dividend, so that the club does not end up with too much money.
Interest -or- Tax-free interest
Return of Capital - This has the added effect of lowering the cost basis of the security
Capital Gain (short, medium, long and 5 year are all available)
Use the drop-down menu next to Cash Account to select the account that the money ended up in.
