Distribution

What is 'Distribution'

Distribution is when the trading volume is higher than that of the previous day without any price appreciation.

2. The removal of assets from a retirement account. The assets are then paid to the retirement account owner or beneficiary.

3. A company's payment of cash, stock or physical products to its shareholders.

4. Distributions of income and capital gains that mutual funds make to their investors periodically during a calendar year.

BREAKING DOWN 'Distribution'

1. A market that is in distribution has already hit its apex and is expected to decline.

2. The retirement account owner (or beneficiary) may be required to pay income tax on distributions received during the year. Early-distribution penalties may also apply if the distribution occurs while the retirement account owner is under the age of 59.5. While distributions from IRAs can occur at any time, certain requirements must be met before distributions can occur from qualified plans, 457 plans and 403(b) accounts. Participants must check with their employers regarding the rules of the plan.

3. The income that is generated from an investment trust is given to investors through monthly or quarterly distributions. In this manner, distributions are similar to stock dividends; however, they usually offer much higher yields of up to 10% a year. The distributions received reduce a trust's taxable income and, therefore, little or no income tax is paid.

4. Mutual funds pay out interest and dividend income received from their portfolio holdings as dividends (income distribution) to fund shareholders. In addition, capital gains from the portfolio's trading activities are generally paid out (capital gains distribution) at the end of the year.

RELATED TERMS
  1. Excess Accumulation Penalty

    The penalty a retirement account owner or the beneficiary of ...
  2. Five-Year Rule

    If a retirement account owner dies before the required beginning ...
  3. Required Minimum Distribution - ...

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  4. Distribution Yield

    The amount of cash flow received or paid out by an annuity, REIT ...
  5. Capital Gains Distribution

    The payment of proceeds prompted by a fund manager's liquidation ...
  6. Non-Qualified Distribution

    1) A distribution from a Roth IRA that occurs before the Roth ...
Related Articles
  1. Financial Advisors

    How to Navigate Taxable Mutual Fund Distributions

    It's almost time for year-end capital gains distributions for mutual funds. Here's how to monitor them and minimize their tax impact.
  2. Financial Advisors

    Required Minimum Distributions: A Reminder

    For many retirees with IRAs and other retirement plans, the end of the year means taking a minimum distribution. Here's what you need to know.
  3. Retirement

    403(b) Plan: Distributions

    By Denise Appleby Generally, amounts received by an employee as a distribution from a 403(b) account are taxable as ordinary income to the employee. If the distribution occurs when the employee ...
  4. Retirement

    SIMPLE IRAs: Distributions

    By Denise Appleby Distributions from SIMPLE IRAs must occur eventually. Until required distribution rules apply, distributions are usually elective . The tax and penalty treatment of distributions ...
  5. Retirement

    SEP IRAs: Distributions

    By Denise Appleby Because the funding vehicle for an SEP is a Traditional IRA, the distributions rules of a Traditional IRA also apply to SEP assets.Traditional IRA Distributions. Distributions ...
  6. Retirement

    Traditional IRAs: Distributions

    By Denise ApplebyDistributions from Traditional IRAs must occur eventually. Until the owner reaches the mandatory distribution age, distributions are optional. The tax and penalty applied to ...
  7. Taxes

    401(k) And Qualified Plans: Distributions

    By Denise ApplebyGenerally, the law requires plans to pay retirement benefits no later than the time an employee reaches normal retirement age, and many plans provide earlier payments under certain ...
  8. Professionals

    Mutual Fund Characteristics and Taxation

    FINRA/NASAA Series 66 Section 2 - Mutual Fund Characteristics and Taxation. In this section mutual fund taxation and distribution.
  9. Professionals

    Tax Consequences of the Investment Company's Activities

    FINRA Series 6 Exam Study Guide - Tax Consequences of the Investment Company's Activities. In this section, Mutual Funds, Capital gains distributions, Gross Investment Income, Net Investmant ...
  10. Mutual Funds & ETFs

    The Basics of Income Tax on Mutual Funds

    Learn about the basics of income tax on mutual funds, including what types of income may be subject to the capital gains tax rate.
RELATED FAQS
  1. How does a qualified retirement plan early distribution work?

    Weigh the pros and cons of taking an early distribution from a retirement account. Most early distributions are subject to ... Read Answer >>
  2. How are trust fund earnings taxed?

    Trust fund earnings that are distributed are paid by the beneficiary. The trust pays taxes on retained earnings and principal ... Read Answer >>
  3. How often do mutual funds pay capital gains?

    Find out how often mutual funds distribute capital gains income, including the basics of how mutual funds work and why frequent ... Read Answer >>
  4. Do beneficiaries of a trust pay taxes?

    Learn how interest income from a trust is taxed, and understand when this money is taxable to the trust and when it is taxable ... Read Answer >>
  5. What are the exceptions to the early distribution penalty for a non-qualified Roth ...

    The exceptions are as follows: The distribution is made on or after the date you reach age 59.5 The distribution is made ... Read Answer >>
  6. Is my non-qualified Roth IRA distribution subject to taxes or early distribution ...

    The ordering rules must be applied to determine whether the distribution is subject to income taxes and/or the early distribution ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center