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 consolidated tax statement. As a result, each year in February we send an Informational Tax Statement to Fidelity Funds 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 who 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.
Mutual Fund Reporting
If you are required to file a federal tax return, the IRS generally requires you to report information for each mutual fund separately in the applicable section of your federal tax return rather than reporting an aggregate total of all your dividends, and/or sales of shares from all your mutual funds under the name "Fidelity Investments".
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.
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.
