DEFINITION of 'IRS Publication 564: Mutual Fund Distributions'

A document published by the Internal Revenue Service (IRS) that provides information on the tax treatment of mutual funds and money market funds. IRS Publication 564 outlines how filers are to report distributions from dividends (both reinvested and ordinary), how to track the cost basis for mutual fund shares and how to identify which shares are sold, and how to report gains and losses when shares are sold or exchanged.

BREAKING DOWN 'IRS Publication 564: Mutual Fund Distributions'

Distributions received from a mutual fund can include an ordinary dividend, capital gain, qualified dividend or a exempt-interest dividend. Rules in IRS Publication 564 do not apply to mutual funds held in a qualified retirement plan, such as 401(k), or an Individual Retirement Account (IRA). Dividends and mutual fund shares in retirement accounts typically grow tax-free until distributions begin.

RELATED TERMS
  1. Mutual Fund Yield

    Dividend payments divided by the value of a mutual fund’s shares. ...
  2. Reinvestment

    Using dividends, interest and capital gains earned in an investment ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  4. Distribution

    1. When trading volume is higher than that of the previous day ...
  5. Exempt-Interest Dividend

    A distribution from a mutual fund that is not subject to income ...
  6. Capital Gains Distribution

    The payment of proceeds prompted by a fund manager's liquidation ...
Related Articles
  1. Financial Advisor

    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.
  2. Financial Advisor

    Understanding How Mutual Funds Pay Dividends

    The process by which mutual fund dividends are calculated, distributed and reported is fairly straightforward in most cases. Here's a look.
  3. Investing

    What You Need to Know About Mutual Funds

    Mutual funds are a good investment opportunity, but investors should know how they operate.
  4. Financial Advisor

    A Mutual Funds Guide for Young Investors

    Learn how mutual funds work, why they are so popular and how younger investors can get started by putting mutual funds in their IRAs or 401(k)s.
  5. Investing

    Trading Mutual Funds for a Living: Is It Possible?

    Find out why trading mutual funds for a living isn't your best bet, including how funds discourage short-term trading and which options may better serve you.
  6. Financial Advisor

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  7. Investing

    How to Find Mutual Funds With High Dividends

    Learn about the important factors to consider when looking for mutual funds that pay high dividends, including how they may impact your taxes.
  8. 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.
RELATED FAQS
  1. 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 >>
Hot Definitions
  1. Collateral Value

    The estimated fair market value of an asset that is being used as loan collateral. Collateral value is determined by appraisal ...
  2. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  3. Current Account

    The difference between a nation’s savings and its investment. The current account is defined as the sum of goods and services ...
  4. Liability

    Liabilities are defined as a company's legal debts or obligations that arise during the course of business operations.
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
Trading Center