Dividends and Distributions: Does IB offer an annual Dividend Statement?
Yes. For all customers IB provides a Dividend Report which shows account detail for all dividends, and payments in lieu of dividends, as well as withholding on these amounts.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax reporting: Interest from Money Market Funds
Interest amounts you receive from money market funds are considered dividends and are reported on Form 1099-DIV. Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest reported on Form 1099-INT.
Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.
Tax Reporting: Municipal Bond Interest
Municipal Bonds (Munis) are interest-bearing debt obligations issued by a state or local municipality. In general, interest paid on municipal issues is exempt from federal taxes and may also be exempt from state and local taxes in the state of issuance. Form 1099-INT reports tax-exempt interest from municipal bonds. Tax-exempt interest from private activity bonds, taxable for purposes of the Alternative Minimum Tax (AMT), is also reported on Form 1099-INT. If you own shares in a municipal bond fund, nontaxability applies only to dividend distributions (capital gain distributions are always taxable). For New York residents, municipal bond interest is also reported to New York State.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Tax-exempt Interest Dividends from Mutual Funds
Tax-exempt interest dividends from mutual funds is reported on Form 1099-INT (box 8).
Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.
Tax Reporting: Original Issue Discount (OID)
Original issue discount (OID) is reported on Form 1099-OID. Although you may not have received a cash payment from the obligation during the year, if the obligation was originally issued at a discount, IBKR is required to report a portion of that OID each year it is held in your account. Refer to IRS Publication 550, Investment Income and Expenses, for information on how to report OID and Publication 1212, Guide to Original Issue Discount (OID) Instruments, to calculate the correct amount of OID to report on your tax return. Consult your tax advisor for further guidance.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax: Interest Income: Original Issue Discount
Original issue discount (OID) is a form of interest on a debt instrument such as a bond or note issued at less than its face amount. The discount is considered additional interest income. A debt instrument generally has OID when the instrument is issued for a price less than its stated redemption price at maturity. OID is the difference between the stated redemption price at maturity and the issue price, and is amortized over the life of the security, recognizing a portion of the discount annually as taxable interest.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Accrued Interest Paid
Accrued interest paid when a bond is purchased is not taxable to the buyer; instead it is taxable income to the seller. Your Form 1099-INT reports the full interest payment credited to your account. Consult your tax advisor for the proper reporting of accrued interest paid at purchase on your return.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax: Interest Income: Accrued Interest
Interest that has been earned or recognized but is not yet payable (credited) is considered accrued interest, for example, interest declared or accumulated on a bond since the last interest payment date up to but not including the settlement date (not yet paid). Accrued interest also includes interest on bonds sold between interest payment dates.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax: Interest Income: US Government Obligations
Interest from US obligations is exempt from state and local income tax.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Tax Reporting: Interest from US Government Obligations
Interest on US obligations is reported on Form 1099-INT in the year the Treasury bill or note matures or you sell it, which may not be the year it was purchased. Refer to IRS Publication 550, Investment Income and Expenses, and consult your tax advisor for more information on reporting interest on US government obligations.
In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
