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Additional ETF Dividend dated 1/31/2007 in a corrected 1099DIV?

  
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Subject Author Date
Additional ETF Dividend dated 1/31/2007 in a corrected 1099DIV? Andrew 02-21-2007
Posted by Andrew on February 21, 2007, 6:28 pm
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 I received today (2/20) a 'corrected' 1099DIV from Pershing
indicating an additional dividends that is reported on the
updated 1099 DIV statement. But the transaction posting the
money to my account in repurchased shares is dated 1/31/2007
(!). I didn't know I was getting this (bought the SPY ETF
last year); I haven't filed, so it's not a big deal to
change my return at this point to match the corrected
1099DIV, but is this right? Why should I have to declare a
dividend that is dated 1/31/2007 on a t/y 2006 return when I
never had control of the money?

Yes, I know the dividend might have been declared in
December, but it wasn't credited to my account until
January. Or is this just the way this works? I can't ever
remember having this situation before; on the other hand, I
never owned a Unit Investment Trust (which is what SPY is)
before either.

--
Regards -

- Andrew

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Posted by Ira Smilovitz on February 22, 2007, 12:05 am
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> I received today (2/20) a 'corrected' 1099DIV from Pershing
> indicating an additional dividends that is reported on the
> updated 1099 DIV statement. But the transaction posting the
> money to my account in repurchased shares is dated 1/31/2007
> (!). I didn't know I was getting this (bought the SPY ETF
> last year); I haven't filed, so it's not a big deal to
> change my return at this point to match the corrected
> 1099DIV, but is this right? Why should I have to declare a
> dividend that is dated 1/31/2007 on a t/y 2006 return when I
> never had control of the money?
>
> Yes, I know the dividend might have been declared in
> December, but it wasn't credited to my account until
> January. Or is this just the way this works? I can't ever
> remember having this situation before; on the other hand, I
> never owned a Unit Investment Trust (which is what SPY is)
> before either.

Certain types of entities have a period of time after the end
of their tax year to distribute their income so as to avoid
having to pay tax themselves. Mutual funds and ETFs are two
such types of entities. If they have a 12/31 fiscal year,
they will often make January distributions which individuals
have to include in their prior year tax returns. That's the
tax law. If you don't like it, complain to your Congressional
representatives.

Ira Smilovitz

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Rich Carreiro on February 22, 2007, 2:08 am
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> 1099DIV, but is this right? Why should I have to declare a
> dividend that is dated 1/31/2007 on a t/y 2006 return when I
> never had control of the money?

Because the Internal Revenue Code says that a Regulated
Investment Company distribution paid out by January 31
of Year N+1 is taxable in Year N if certain conditions
are met re: when the distribution was declared by the
fund.

> Yes, I know the dividend might have been declared in
> December,

And that's one of the conditions. Since it was declared
in Year N and paid by 31 Jan Year N+1, it's taxable
in Year N.

--
Rich Carreiro rlcarr@animato.arlington.ma.us

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Andrew on February 22, 2007, 5:26 pm
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Rich Carreiro wrote:


>> 1099DIV, but is this right? Why should I have to declare a
>> dividend that is dated 1/31/2007 on a t/y 2006 return when I
>> never had control of the money?

> Because the Internal Revenue Code says that a Regulated
> Investment Company distribution paid out by January


OK Rich and Ira - appreciate the reply - I'll make a note of
this in my file to remind me again next year - thanks - I
figured this was probably it. Makes sense. I guess that's
perhaps a good reason not to try to file as soon as you can
to ensure you have given the powers that be enough time to
get ALL the paperwork to you.

--
Regards -

- Andrew
///
Subject: Re: Am I a resident?
Newsgroups: misc.taxes.moderated
Approved: rdadams@smart.net
Precedence: first-class

Great answers, thanks everyone.

I kinda suspected the problem wouldn't be becoming an
Arizona resident; the problem is getting California to let
me go. From a practical standpoint, suppose I do become an
Arizona resident, and did the things you recommended to
reduce my California ties (aside from selling the CA
house--the market it too soft right now). How likely would
you say it is that this would be an audit issue? Won't their
computers notice me the first year I do NOT file a
California return?

I'm not real enthusiastic about a step that's likely to
trigger an audit whether I can ultimately prevail or not.
Been there, done that.

Ken Meyer

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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