Understanding Your Fidelity 2010 Informational Tax Statement

Our corporate and non-prototype Fidelity customers, who are exempt recipients for 1099 reporting purposes, have asked to see their year-end account information as it would appear in a Form 1099 Tax Statement. As a result, each year in February we send an Informational Tax Statement to brokerage account customers who our records indicate are exempt recipients for 1099 reporting purposes. This guide provides detailed information to help you understand your Informational Tax Statement.

Reporting to the IRS

Please note that we do not send the information in the Informational Tax Statement to the IRS because we only provide Informational Tax Statements to customers who our records indicate are exempt recipients for 1099 reporting purposes and therefore do not receive a Form 1099 for most transactions in their accounts. If you are required to file a return, the IRS may impose a negligence penalty, or other sanction, if any income from an account for which you receive an Informational Tax Statement is taxable and the IRS determines that it has not been reported by you.

Substitute Payments in Lieu of Dividends

If you received a substitute payment in lieu of dividends or tax–exempt interest, you should have received a separate Form 1099–MISC to report these substitute payments to you and the IRS. Fidelity is offering a credit adjustment to eligible individual shareholders who received certain substitute payments in lieu of qualified dividends. However, customers with corporate accounts are not eligible for this credit adjustment.

Tax Statement Highlights

New Cost Basis Reporting Regulations will Begin with Tax Year 2011
Due to provisions in the Emergency Economic Stabilization Act of 2008, Fidelity will begin reporting cost basis for certain covered securities on Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) beginning with Tax Year 2011 (printed and mailed in January - February 15, 2012). The Internal Revenue Service (IRS) Form 1099-B is part of your Tax Statement and is also part of the information that we are required to report to the IRS. Generally, the new regulations define covered securities as follows:

• Stock in a corporation purchased on or after January 1, 2011
• Registered Investment Companies, including open-end mutual funds, and stocks acquired in dividend reinvestment plans purchased on or after January 1, 2012
• All other securities, defined by the Treasury Department, purchased on or after January 1, 2013

This means you will begin to see changes with the 2011 IRS Form 1099-B (printed and mailed in January/February 2012), which will include adjusted basis for covered stock acquired on or after January 1, 2011 and subsequently sold in 2011.

New Account Fees Section

Beginning with Tax Year 2010, you will see a new section in the Detail Information portion of your Informational Tax Statement, summarizing all fees charged to your account during the year. You may find it useful, as you prepare your tax return.

Widely Held Fixed Investment Trusts

Due to IRS reporting requirements, Fidelity has enhanced tax reporting for holders of securities known as widely held fixed investment trusts (WHFITs). Generally securities in this category include:

• Mortgage pools (such as securities issued by agencies commonly known as Ginnie Mae, Fannie Mae, and Freddie Mac)
• Unit investment trusts (trusts holding a specified group of stocks, bonds, options, or other assets)
• Royalty trusts (such as trusts holding interests in properties producing gas, oil, or minerals)
• Commodity trusts (such as certain trusts that hold precious metals)
• HOLDRS (such as certain trusts which hold a specified group of stocks)

Fidelity does not include Unit Investment Trust and Mortgage-Backed Security Information on Informational Tax Statements

For WHFITs, we provide your prorated gross income and prorated expense information, as well as information you may need to accurately report sales and resulting realized gains and losses. For example, this means that we provide your share of all expenses incurred by the trust and your share of all income received by the trust before the trust has made any deductions for expenses. Throughout this guide, when applicable, we will describe how this new information appears on your tax reporting statement.

If you owned a royalty trust, Fidelity may mail you by March 15 a booklet of additional information relayed to us by the royalty trust. In the past you would have received this booklet directly from the trust. The new IRS regulations now require us to print and mail those booklets.

International Trading

As part of Fidelity's enhancements designed to assist customers trading on foreign exchanges and in foreign currencies, we have enhanced our tax reporting. For example, if you sold a security in a currency other than U. S. dollars (USD), the Realized Gain/Loss sections now provide both the foreign currency proceeds and the USD equivalent of those foreign currency proceeds (as of the trade date of the sale) in the "Proceeds" column. Similarly, if you had previously purchased a security in a currency other than USD, the Realized Gain/Loss sections now provide both the foreign currency cost and the estimated USD cost basis (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase) in the "Cost Basis" column.

In addition, a new supplemental Currency Realized Gain/Loss section provides realized gain or loss information for certain transactions in which a customer disposed of foreign currency. Those transactions are exchanges of foreign currency for USD, exchanges of foreign currency for another foreign currency, and exchanges of foreign currency for a security.

See the information, below, about the Short Term Realized Gain/Loss, Long Term Realized Gain/Loss, and Currency Realized Gain/Loss sections for more information.

Transferred Accounts

If your account was transferred to Fidelity in 2010, your Informational Tax Statement only includes activity from the time your account was established here. You may wish to contact your former clearing firm for information about any activity prior to the transfer.