Conference nyoss1::market_investing

    Sorry, you must report any dividend and capital gain distribution that
    your mutual fund tells you about on Form 1099.  It is not a PAPER gain,
    because the fund actually paid you in cash or additional shares.
    
    Doubly sorry, you can't take a loss unless you actually sell your
    shares.

    
    Now I don't understand this -- even if I report the gain mutual
    fund tells me to report,  do I still have to report the actual
    gain when I sell my shares?  My guest is those two are different
    gains.

    Yes, these are two different gains; and both are real gains, not paper
    ones.  One gain is the "involuntary" one the mutual fund does on your
    behalf by earning dividends and selling from its portfolio at a (net)
    profit and handing the proceeds to you -- the distribution reported on
    the Form 1099 they send you.  The other gain is the "voluntary" one you
    cause by selling your shares in the mutual fund, resulting a gain or
    loss from your purchase price of the original shares and any other
    shares you obtained by the "involuntary" distributions you received.
    
    So, keep those periodic statements from the mutual fund in a safe place
    as long as you own any shares of the fund.

    I believe that any gain that you receive through the years is added to
    the cost basis of the fund to determine the taxable gain. Keeping
    accurate records is very important.

    
    I don't know if Mutual fund report to IRS every transaction.
    But that is not the point.  I wonder how many people really
    look at their mutual fund transactions record and report the
    tax.   Filing tax is getting too complicate.

I can tell you from first hand experience that the IRS does, indeed, look at
Mutual Fund transaction summaries.  As I found out, when/if they decide to audit
you, they roll up EVERYTHING with your SS# on it.  I can also tell you, again 
from first hand experience, that audit is the time you will feel vindicated if
you have always played strictly by the rules and kept copies of EVERYTHING
pertaining to your tax filings.  Recall, your records are "fair game" going back 
3 years from date of filing (7 years if they have reason to suspect fraud).  
After a half-dozen challanges to claims are answered with documentation 
supporting those claims, the audit turns into a general "how's the weather" 
session.

Dave

    
    Since I always deposit into funds and pay bill from funds using
    fund checks,  it is going to be difficult to figure out capital
    gain/loss.  Is there any software help in this regard?

    I don't know about any other companies, but Fidelity does an excellant
    job of sending out quarterly and end-of-year summaries of all my mutual
    fund dividends and capital gains/losses.   There are IRS reporting
    requirements on this stuff.  You should be getting an equivalent
    report.  
    
    	Dave.

    
    RE: .8
    
    You have to figure out your own capital gain/loss other than
    the capital gain/loss Fidelity tells you.