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. Non-Qualified Distribution

    1) A distribution from a Roth IRA that occurs before the Roth ...
  2. Form 1099-R

    An Internal Revenue Service (IRS) form with which an individual ...
  3. Required Minimum Distribution - ...

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  4. Lump-Sum Distribution

    A one-time payment for the entire amount due, rather than breaking ...
  5. Distribution In Kind

    A payment made in the form of securities or other property, rather ...
  6. Qualified Distribution

    Distributions made from a Roth IRA that are tax and penalty free. ...
Related Articles
  1. Financial Advisor

    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. Retirement

    Tough Times: Should You Dip Into Your Qualified Plan?

    401(k)s, pensions and profit-sharing plans can be a source of cash, but there are consequences to this option.
  3. Retirement

    Combining Your Plan Assets? Not So Fast!

    You might reduce the costs of maintaining more than one account, but you could also be forfeiting tax benefits.
  4. 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 ...
  5. Retirement

    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 ...
  6. Retirement

    3 Deadlines For Retirement Plan Beneficiaries

    To take full advantage of new RMD regulations, beneficiaries need to take action before important deadlines.
  7. ETFs & Mutual Funds

    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.
  8. Financial Advisor

    Estate Planning Tips for Tax-Deferred Investments

    Bequeathing assets in tax-deferred investments can be tricky. Here are some of the pitfalls and how to avoid them.
  9. Financial Advisor

    Multiple Accounts? Here's How to Calculate RMDs

    Ever wondered about how to calculate required minimum distributions on multiple accounts? Here's a quick primer.
  10. Retirement

    Asset Distributions A Key Consideration For Retirees

    How you distribute qualified retirement plan money can affect your taxes and Social Security benefits.
RELATED FAQS
  1. Can I elect to NOT have income tax withheld from an IRA (NOT ROTH) distribution before ...

  2. Will I have to pay taxes every year when I receive the $25,000 from my trust fund?

    My inheritance is in the form of a trust fund that distributes $25,000 per year for 10 years. ... Read Answer >>
  3. 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 >>
  4. 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 >>
  5. Why are shareholder distributions eliminated and not added to the net income when ...

    When considering selling an S Corp. I am being told that shareholder distributions cannot be added back to determine its ... Read Answer >>
  6. Clark recently purchased shares in ABC mutual fund with some funds from the sale ...

    The correct answer is c). When an investor receives declared dividends and capital gains distributions, they can implement ... Read Answer >>
Hot Definitions
  1. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center