Illustrated Explanation of a Tax Statement

Tax reporting statement

Show all

• 1099-DIV—Dividends and Distributions
  

  Lists all taxable dividends, long-term capital gain distributions, nondividend distributions, and certain investment expenses, as well as foreign tax paid.This may include dividends and/or distributions from the mutual fund you use as your core money market fund. Please note, this year we will begin reporting tax-exempt interest dividend and private activity bond interest dividend amounts (mainly from mutual funds or other regulated investment companies) on lines 10 and 11 of this form. When computing any Alternative Minimum Tax (AMT) liability (see the IRS Instructions for Form 6251, Alternative Minimum Tax-Individuals (PDF)), the IRS requires you to include any private activity bond interest dividends in this calculation. In prior years Fidelity was required to report this information on lines 8 and 9 of Form 1099-INT. Those lines on the 1099-INT will now primarily report tax-exempt interest from individual bonds and not from mutual funds. Dividends and capital gain distributions reported on Form 1099-DIV must be reported on your federal income tax return regardless of whether they were paid in cash or reinvested.

  The dividend amounts that we report may be higher than the amounts that you actually received. For example, if foreign tax was paid, the amount that you may be able to claim as a deduction or credit is reported in Line 6 on Form 1099-DIV and that amount is also included in the dividend amount reported in Line 1a and, if applicable, Line 1b. For this reason, the total dividends reported on the form may be higher than the amount that you actually received. We report all dividends in U.S. dollars (USD). If the dividends that you received were paid in a currency other than USD, we convert the foreign currency dividends into USD and report the USD equivalent on Form 1099-DIV. For additional 2012 foreign tax credit pass-through information for Fidelity mutual funds, in early February you will be able to see the Important Information for Individuals about Foreign Tax Paid letter on the Fidelity Fund-Specific Tax Information page.

  IRS reporting requirements governing widely held fixed investment trusts (WHFITs) are another situation where Fidelity may report a dividend amount higher than the amount you may have received. If you owned certain unit investment trusts or HOLDRS trusts, Fidelity reports investment expenses on Line 5. We also include those expenses in the dividends reported in Line 1a, because we are required to report gross trust dividends including expenses. Because we are reporting gross dividends, the total dividends reported on the form may be higher than the amount that you actually received. The same situation may occur for tax-exempt interest dividends, reported in line 10. These expenses are not included in line 5. Instead, they are listed in the Supplemental Tax-Exempt Investment Expense section, which you may find near the end of your statement if there are appropriate expenses to report. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF)This content will appear in a pop-up window., or consult your tax advisor.

  We report all dividends in U.S. dollars (USD). If the dividends that you received were paid in a currency other than USD, we convert the foreign currency dividends into USD and report the USD-equivalent on Form 1099-DIV.

• 1099–INT—Interest Income
  

  Lists all interest earned on government and corporate debt obligations and short-term certificates of deposit, as well as interest earned from cash in your account.

  Line 8 reports tax-exempt interest from individual securities, but not from mutual funds or other regulated investment companies. We now report those tax-exempt interest dividends on Form 1099-DIV, as described above. In addition to your federal tax return, you may also be required to report this information on your state income tax return.

  Line 9 reports any applicable specified private activity bond interest. Specified private activity bond interest must be taken into account in computing federal Alternative Minimum Tax (AMT). The tax-exempt interest reported on Line 8 includes this specified private activity bond interest, if any. For more information, see the IRS Instructions for Form 6251, Alternative Minimum Tax–Individuals (PDF). In addition to federal reporting, Fidelity may be required to report all or a portion of your total exempt income to California or to other state tax authorities.

  Line 10 shows CUSIP numbers for tax-exempt securities on which tax-exempt interest was paid to you during the calendar year and reported on Line 8. In cases in which we are reporting tax-exempt interest from more than one CUSIP, the line is marked, "various."

  Due to IRS reporting requirements governing widely held fixed investment trusts (WHFITs), for certain unit investment trusts or mortgage-backed securities distributing taxable interest, Fidelity reports your prorated share of investment expenses in Line 5. Those expenses are also included in the interest reported in Line 1 because we are required to report your share of any unit investment trust or mortgage-backed security gross interest before expenses were subtracted. For this reason, the interest reported on the form may be higher than the amount that you actually received. In the same manner, we also include your prorated share of tax-exempt interest investment expenses in the amount reported in tax-exempt interest on Line 8. We provide details on those expenses in the Tax-Exempt Interest Investment Expenses section (shown if applicable) near the end of the supplemental section of your tax statement. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF). This content will appear in a pop-up window. , or consult your tax advisor.

  We report all interest in U.S. dollars (USD). If the interest that you received was paid in a currency other than USD, we convert the foreign currency interest into USD and report the USD-equivalent on Form 1099-INT.

• 1099–MISC—Miscellaneous Income
  

  Lists other reportable income, such as royalty payments from grantor trusts and substitute payments made in lieu of dividends. Royalty payments are generally reported on your federal income tax return, Form 1040, Schedule E. Substitute payments in lieu of dividends are generally reported as "other income" on Line 21 of your federal income tax return, Form 1040, and should be taxed at ordinary federal income tax rates. You may receive a separate Form 1099-MISC for Line 3, "Other Income," if you received a credit adjustment for a substitute payment in lieu of a qualified dividend or if you received certain credits, adjustments, or other income. Consult your tax advisor and/or tax return instructions for guidance on the reporting of other types of income that may be listed here. See Annual Credit for Substitute Payments for additional information on credit adjustments paid by Fidelity for substitute payments in lieu of qualified dividends.

  Due to IRS reporting requirements governing widely held fixed investment trusts, if you owned certain royalty or HOLDRS trusts, Fidelity reports various expenses, as well as adjustments which affect the estimated cost basis of your shares, in the applicable supplemental sections of your tax statement. We also include your pro-rated share of those expenses in the royalties (Line 2) reported in the 1099-MISC, because we are required to report your royalties before expenses were subtracted. For this reason, Fidelity may report a higher amount of royalties than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations. In addition, by March 15, if you owned a royalty trust, Fidelity may mail you additional information relayed to us by the royalty trust. For more information, see IRS Publication 550, Investment Income and Expenses (PDF). This content will appear in a pop-up window. , or consult your tax advisor.

• Summary of Proceeds from Broker and Barter Exchange Transactions
  

  Lists gross proceeds less commissions from sales.

• Summary of Original Issue Discount
  

  Lists total original issue discount.

• 1099–B—Proceeds from Broker and Barter Exchange Transactions
  

  Form 1099-B lists all proceeds from the sale or other disposition of stocks, bonds, mutual funds; subscription rights expiring with a cash equivalent, taxable tenders and mergers; and short sales if opened no earlier than 2011 and closed in 2012. We report all transactions on a trade-date basis and they are the net amount after commissions. The cost basis reported reflects certain adjustments, if applicable. You may be required to make additional adjustments to properly calculate your taxable gain/loss.

  Cost basis reporting regulations

  Fidelity continues to implement the IRS cost basis reporting requirements for tax year 2012. These new rules began a multiyear implementation period on January 1, 2011. They require brokerage firms and mutual fund companies, including Fidelity, to report adjusted cost basis information related to the sale of securities that are identified by the IRS as "covered securities."

  According to the regulations, here is the implementation schedule and the specified securities:

  January 1, 2011. All stock held in a corporation, except that for which average cost is permissible, acquired on or after January 1, 2011. Some adjustments to the original cost basis of equity securities include, but are not limited to, the following:

  • Adjustments associated with wash sales. For 1099-B reporting purposes, wash sales include only those securities held within one single shareholder account (instead of across accounts for the same shareholder) that have the same CUSIP number (versus "substantially identical" securities, which may have different CUSIP numbers)
  • Adjustments resulting from corporate actions

  January 1, 2012. Any stock for which average cost is permissible. This includes registered investment companies (including open-ended mutual funds, closed-ended mutual funds, and certain exchange-traded funds) and shares of stock acquired through dividend reinvestment plans (DRIPs) acquired on or after January 1, 2012.

  January 1, 2014. Options, rights, warrants, and any other financial instruments that the IRS deems appropriate, which may include, but are not limited to, fixed income instruments and any type of contract tied to commodities acquired on or after January 1, 2014.

  As part of our efforts to continue to comply with the IRS cost basis reporting requirements, Fidelity has enhanced the format and content of the Form 1099-B. These changes are designed to more closely mirror Form 8949, Sales and Dispositions of Other Assets. These enhancements should make it easier to complete Form 8949, as well as Form 1040, Schedule D (many account holders must complete Form 8949 prior to completing Schedule D). We organize the information on the Form 1099-B into as many as five different sections: short-term covered, short-term noncovered, long-term covered, long-term noncovered, and a section for transactions whose basis is not reported the IRS and whose term is unknown.

  Fidelity has provided most of this cost basis information to customers for many years. It is the requirement that we also convey cost basis information to the IRS that is at the heart of the changes to Form 1099-B. Prior to 2011, Fidelity provided cost basis information in the Supplemental Realized Gain/Loss Sections of the Tax Reporting Statement. Beginning with tax year 2011, we moved most of this information to Form 1099-B.

  For every transaction reported on the 1099-B (whether concerning a covered or noncovered security), Fidelity reports the following information to the IRS:

  • Description (8)
  • Date of Sale or Exchange (1a)
  • Sales Price (2a)
  • Federal Income Tax Withheld (4).

  Note that the numbers following each category correspond to the equivalent box numbers on the stand-alone IRS Form 1099-B.

  The cost basis information that we provide to the IRS, when applicable, includes

  • Date of Acquisition (1b)
  • The holding period of the security that you sold (short-term, long-term or unknown) (1c)
  • Cost Basis (3)
  • Wash Sale Loss Disallowed (5)
  • Basis is reported to the IRS (6)

  The supplemental realized gain/loss sections in your 2012 tax statement continue to provide additional cost basis information for fixed income securities purchased either above or below par, for options transactions, and for security transactions conducted in a currency other than U.S. dollars.

  Generally, as you complete your tax returns, you must report all transactions from Form 1099-B and any other transactions including those listed on the Supplemental Realized Gain/Loss sections of the tax statement, whether for covered or non-covered securities.

  Here is a summary of where you will find transaction information for various kinds of securities.

  Type of security	Location of cost basis information in your tax statement
  Equities Mutual funds and other securities in dividend reinvestment plans Fixed-income securities without adjustments Short sales opened in 2011 or 2012 and closed during 2012	1099-B only
  Foreign equities Foreign Fixed-income securities Domestic Fixed-income securities with cost basis adjustments	1099-B Additional information is also provided in the Realized Gain/Loss sections of the supplemental pages
  Options Short sales, opened prior to 2011 and closed in 2012 Foreign currency transactions	Supplemental Realized Gain/Loss sections only

  To help you complete Form 1040, Schedule D, using information provided in the Form 1099-B, read Fidelity's web guide, Helpful Hints for Completing Your 2012 Form 1040, Schedule D.

  Mutual funds and other securities in dividend reinvestment plans (DRIPs)—bifurcation of information

  Fidelity follows IRS rules for calculating average cost basis for mutual funds and other securities in certain DRIPs. Fidelity reports this cost basis on the 1099-B to the IRS and clients for use in their capital gain and tax calculations.

  Positions, using the average cost calculation method, that include both noncovered and covered shares are considered bifurcated. As such, these positions comprise the following:

  • Shares acquired prior to January 1, 2012
  • Additional share purchases that occur on or after January 1, 2012, of the same mutual fund

  For mutual fund positions that are considered bifurcated

  • The average cost basis for covered and noncovered lots is calculated separately.
  • Fidelity only reports cost basis for covered lots to the IRS. It does not report cost basis for noncovered lots to the IRS.

  Reporting short sales

  Beginning with tax year 2011, the new IRS cost basis reporting rules require us to report on Form 1099-B all short sales in the year in which the short sale is closed. Before tax year 2011, we were also required to report short sales on Form 1099-B, but when they were opened. Short sales opened prior to 2011 and closed in 2012 are an exception to this rule. Those transactions are reported instead in the Supplemental Realized Gain/Loss sections of your tax statement. In this way, we will avoid reporting the same short sale twice to the IRS. The IRS generally requires shareholders to report all short sales in the year that the short sale is closed —this is not a change from prior years.

  Widely held fixed investment trusts (WHFITs) reporting—return of principal

  Due to IRS reporting requirements governing WHFITs, we report your prorated share of the sales proceeds from the portfolios of unit investment trusts, securities derived from mortgage pools, or real estate investment conduits (REMICs) as return of principal on Form 1099-B (reported as PRINCIPAL on the form). We report your share of return of principal, whether or not you actually received a payment, because we report gross return of principal before any expenses were deducted. These reported proceeds may not match any distributions that you may have received during the year. Furthermore, for WHFIT securities, due to "receipt-based" reporting rules, your trust is required to report your prorated share of sales proceeds as of the date that they were sold by the trust and your prorated share of expenses as of the date on which they were incurred by the trust-not on the date any such sales proceeds are distributed to shareholders. This means that you may only have received a return of principal payment, listed on your 2012 Form 1099-B, in January or February 2013. You must generally report return of principal on Form 8949 and/or Schedule D in order to match our reporting to the IRS on Form 1099-B. In addition, you should generally reduce your security's basis by the amount of the return of principal. Fidelity includes return of principal in our calculation of your estimated cost basis. If your basis is reduced to zero, any additional return of principal should also be reported as a short-term or a long-term gain, depending upon how long you have owned the security.

  Foreign securities

  We report all proceeds in U.S. dollars (USD) on Form 1099-B. If the proceeds that you received from a transaction were paid in a currency other than USD, we convert those foreign currency proceeds into USD based on exchange rates on the trade date of the transaction and report those USD-equivalent proceeds on Form 1099-B. We provide additional information regarding such transactions in the Realized Gain/Loss sections of the Supplemental Information pages of this statement.

  *Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for tax purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• 1099–OID—Original Issue Discount
  

  Lists the Original Issue Discount (OID) that you must report for the current year. OID reports the earned portion of the difference between the stated redemption price at maturity (if greater than one year) and the issue price of a bond, debenture, note, or other evidence of indebtedness issued at a discount (e.g., zero-coupon bond, long-term CD) that is attributable to the selected tax year. OID on Treasury obligations, listed in Column 6, is exempt from state and local income taxes. If you hold collateralized debt obligations (CDO), which include real estate mortgage investment conduits (REMIC) and collateralized mortgage obligations (CMO), you may receive a separate 1099-OID form in March to report this OID. You may need to make certain adjustments to this information. Consult your tax advisor or see IRS Publication 1212 Guide to Original Issue Discount (OID) Instruments (PDF). Opens in a new window. for more specific reporting information.

Supplemental information

Show all

• Details of 1099-DIV Transactions

  Due to the added 1099-DIV reporting requirements, Fidelity has revised the Details of 1099-DIV Transactions section into three new subsections: Total Ordinary Dividends and Distributions Detail; Total Capital Gains Distributions Detail; and Other Distributions, Tax, and Expense Details. Each of these subsections appear only if they apply to the transactions reported on your 1099-DIV.

  

  We identify the short-term capital gain distributions portion of ordinary dividend distributions in this section. Generally, short-term capital gain distributions are nonqualified dividends, and as such, are taxed as ordinary income. However, a portion of the short-term capital gain distribution may be a qualified dividend and subject to one of the lower federal long-term capital gain tax rates. Any portion of the short-term capital gain distribution that is potentially subject to one of the lower tax rates is included as qualified dividends in Line 1b.

  The 2012 Percentage of Income from U.S. Government securities letter for applicable Fidelity Funds will be available in early January in Fidelity's Tax Center. You may find this letter useful if you received dividends from Fidelity Funds that received income from U.S. Government securities.

  Tax-Exempt Interest Dividend details are also listed in this section, transaction by transaction. As we stated at the beginning of this guide, the 2012 Form 1099-DIV now provides tax-exempt interest dividend and specified private activity bond interest dividend amounts (mainly from mutual funds or other regulated investment companies) on lines 10 and 11. Since we have reported tax-exempt interest dividend amounts in prior years on Form 1099-INT, only the placement of this dividend information is new. For state tax-exempt information for Fidelity federal tax-exempt funds, in early January you will be able to see the Percentage of State Tax-Exempt Income letters on the Fidelity Fund-Specific Tax Information page.

  Any reported foreign tax paid on Line 6 is also included in the dividends reported on Line 1a and, if applicable, Line 1b. For mutual funds, you will see such individual foreign tax entries (Line 6) as part or all of certain matching individual entries for Lines 1a and 1b. For individual securities we do not give such a payment-by-payment accounting. For additional 2012 foreign tax credit pass-through information for Fidelity mutual funds, in late January you will be able to see the Important Information for Individuals about Foreign Tax Paid letter on the Fidelity Fund-Specific Tax Information page.

  Due to IRS reporting requirements governing widely held fixed investment trusts (WHFITs) the dividend amounts that we report for these securities may be higher than the amounts that you actually received. In each case this is due to the requirement that we report gross dividends before any expenses have been deducted. For WHFITs, dividends are reported as of the declaration date, not the distribution date.

  Undistributed income from a unit investment trust (UIT)

  You may find a 12/31 reporting item from your UIT, listed for Lines 1 and/or 2, which is income undistributed by your trust. Due to IRS reporting requirements, we report this income, even if it was undistributed. Once distributed in the following year, this income will be reported as a positive amount (since you have now received a distribution) and a negative amount (since it was previously listed as an undistributed distribution), thereby avoiding reporting the same distribution twice.

  

  Total Capital Gain Distributions (2a) may include, if applicable Unrecaptured Section 1250 Gain (2b), Section 1202 (28%) Gain (2c), and Gains from Collectibles (28%) (2d). The portion of Capital Gain Distributions subject to 15% Rate Gain is equal to (2a) less amounts shown in columns (2b) through (2d). We have added a separate column, listing these 15% rate gain details to the 2012 Total Capital Gains Distributions Detail section.

  

  We also changed the organization and contents of this third section of the 1099-DIV details. Nondividend distributions, state tax withholding information (applicable this year to a small number of California residents only), as well as investment expense details and employer-sponsored stock plan liquidation distribution information are all listed in this section.

  The amount of any non-dividend distributions (column 3) you received generally reduces the basis for the applicable security by the same amount of the distribution.

  If you owned certain unit investment trusts, or HOLDRS trusts, Fidelity reports the investment expense details for expenses reported on Line 5. We also include those expenses in the dividends that we report. For this reason, the total reported gross dividends may be higher than the amount that you actually received. Investment expenses are generally deductible, subject to applicable limitations. Tax-exempt interest dividend details, reported in column 10, are not included in line 5. Instead, they are listed in the Supplemental Tax-Exempt Investment Expense section which you may find near the end of your statement if there are appropriate expenses to report.

  For more information, see IRS Publication 550, Investment Income and Expenses(PDF). This content will appear in a pop-up window., or consult your tax advisor.

• Details of 1099-INT Transactions

  We present Interest Income details in two subsections: Interest Income Details, including Corporate and Tax-Exempt Obligations, and Other Interest Details, Including U.S. Government Securities. Each of these subsections appear only if they apply to the amounts reported on your 1099-INT.

  

  We show Interest Income (1) details (a combination of Interest Payments received, Accrued Interest received on the Sale of Bonds, and OID Paid to you on Short-Term Instruments), as well as Tax-Exempt Interest (8), Specified Private Activity Bond Interest (9), and Foreign Tax Paid (6) details in this subsection. Any Specified Private Activity Bond Interest (9) amounts are also included in the Tax-Exempt Interest (8) column. Generally Specified Private Activity Bond Interest must be included in the calculation of Alternative Minimum Tax (AMT).

  

  We show Interest on U.S. Savings Bonds and Treasury Obligations (3) (a combination of Interest Payments on Treasury Bonds and Notes, Accrued Interest you received on the Sale of Treasury Instruments, and U.S. T-Bill Interest) in this subsection, as well as Federal Income Tax Withheld (if any) on interest reported on the 1099-INT.

  IRS reporting requirements governing widely held fixed investment trusts (WHFITs)

  Due to the WHFIT requirements, we must generally report income based upon the date it is received by the trust and expenses as they are incurred by the trust. Here are some of the reporting consequences:

  • Investment expenses (5)—If you owned certain unit investment trusts or mortgage-backed securities, Fidelity details the investment expenses reported on Line 5. We also incorporate those expenses into the detail interest entries for Line 1 of the 1099-INT, because we are required to report unit investment trust interest before expenses have been deducted. For this reason, the reported gross interest amounts may be higher than the amounts that you actually received. In the same manner, we also incorporate your prorated share of tax-exempt interest investment expenses in detail entries for tax-exempt interest (Line 8). Tax-exempt interest dividend expenses are not included in Investment Expenses (column 5). Instead, they are listed in the Supplemental Tax-Exempt Investment Expense section which you may find near the end of your statement if there are appropriate expenses to report.
  • Undistributed income from a unit investment trust (UIT)—If your UIT had undistributed 2012 income, you may find it listed as a 12/31 distribution for Line 1. We report this income, even though it is undistributed. Once distributed in the following year, this income will be reported on next year's tax statement as a positive amount (since you received a distribution) and a negative amount (since it was listed on this year's tax statement as an undistributed distribution), thereby avoiding reporting the same distribution twice.
  • Interest income from mortgage-backed securities—Following the IRS reporting requirements, we report income from mortgage-backed securities based on the record date rather than on any subsequent distribution date. As a result you may find interest, distributed by your mortgage-backed security in January or February 2013, reported as 2012 income. We list such interest in the details for Line 1, dated 12/31.

  For more information, see IRS Publication 550, Investment Income and Expenses (PDF). This content will appear in a pop-up window. , or consult your tax advisor.

• Miscellaneous Income
  

  Substitute payments have been separated into two categories: those that are potentially eligible for a credit adjustment and those that are not. In early March 2013, or soon thereafter when all reclassification information is available, Fidelity expects to provide eligible customers* with a credit adjustment for substitute payments received in lieu of qualified dividends during the 2012 tax year. See Annual Credit for Substitute Payments for more information on Fidelity's credit adjustment for substitute payments in lieu of dividends, including how the credit is calculated.

  You should include any credit adjustments you received in 2012 for substitute payments in lieu of qualified dividends received during the 2011 tax year in your income for 2012. Fidelity will send a separate Form 1099-MISC only for Line 3, "Other Income", which includes these adjustments, only if the total of all other income reportable to you on that line reaches the reporting threshold for that form. You may, therefore, need to consult your account statements to determine the credit adjustment amount, if any, to report on your tax return. The annual credit adjustment program is not guaranteed to remain in effect indefinitely. Fidelity reserves the right to amend or terminate the program.

  Due to IRS reporting requirements governing widely held fixed investment trusts (WHFITs), if you owned certain royalty or HOLDRS trusts, Fidelity reports various expenses, as well as adjustments which affect the estimated cost basis of your shares, in the applicable supplemental sections of your tax statement. We also include your pro-rated share of each of those expenses as separate items listed as royalty income (Line 2) entries. The regulations require us to report your royalties before subtracting expenses. For this reason, the total royalty amounts reported on the form may be greater than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF). This content will appear in a pop-up window. or consult your tax advisor. In addition, by March 15 we will mail royalty trust shareholders supplemental information relayed to us by the trust.

  *You may be eligible for the credit adjustment with respect to a substitute payment in lieu of dividends on a security on loan if (1) you are a U.S. person (including U.S. citizens and resident aliens), (2) you received the substitute payment in an account registered as an individual, joint, trust, estate, or "pass-through" entity type (partnership, LLC, LLP, etc.), (3) the account is open at the time the credit adjustment is made, and (4) you would have been eligible to treat (and report to the IRS) the dividend paid on the security on loan as a qualified dividend had the security not been on loan and had you received the dividend paid on that security rather than the substitute payment in lieu of the dividend. (You will generally satisfy this condition if the applicable security is from a domestic corporation or a qualified foreign corporation, and you would have held the security unhedged for the requisite holding period for qualified dividend treatment.) Generally, qualified dividends are those paid on shares of domestic corporations and certain eligible foreign corporations, as long as the shares are held unhedged for the requisite period of time. Fidelity reserves the right to deny the credit adjustment to any customer who Fidelity determines will be ineligible to receive the tax benefit of the reduced qualified-dividend tax rate and to amend the eligibility terms of the program.

• Original Issue Discount
  

  Securities in the Original Issue Discount details section marked with an (A) in the "Total" column report the actual accrual information based on the purchase price of the non--real estate mortgage investment conduits (REMIC) securities. For all other securities, Fidelity uses the default from IRS Publication 1212, Guide to Original Issue Discount Instruments (PDF). Opens in a new window. to estimate the accrual amount.

  If you hold collateralized debt obligations (CDO), which include real estate mortgage investment conduits (REMIC) and collateralized mortgage obligations (CMO), you may receive a separate 1099-OID form in March to report this OID. You may need to make certain adjustments to this information. Consult your tax advisor or see IRS Publication 1212, Guide to Original Issue Discount Instruments (PDF). Opens in a new window. for more specific reporting information.

• Short-Term Realized Gain/Loss
  

  Due to IRS cost basis reporting rules, certain aspects of Fidelity's cost basis reporting changed beginning with tax year 2011. See the introductory portion of this guide for further information.

  Here is a summary of where you will find transaction information for various kinds of securities.

  Type of security	Location of cost basis information in your tax statement
  Equities Mutual funds and other securities in Dividend Reinvestment Plans Fixed-income securities without adjustments Short sales opened in 2011 or 2012 and closed during 2012	1099-B Only
  Foreign equities Foreign Fixed-income securities Domestic Fixed-income securities with cost basis adjustments	1099-B Additional information is also provided in the Realized Gain/Loss sections of the supplemental pages
  Options Short sales, opened prior to 2011 and closed in 2012 Foreign currency transactions	Realized Gain/Loss sections only

  The Short-Term Realized Gain/Loss section provides information that may be helpful when completing Form 8949 and/or Form 1040, Schedule D. If this section appears on your report, refer to Helpful Hints for Completing Your 2012 Form 1040, Schedule D for more information.

  If you purchased a security in a foreign currency, then following its sale or disposition, this section provides both the cost in that currency and the estimated United States dollar (USD) cost basis* in the “Cost Basis” column (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase). If you sold a security in a foreign currency, this section provides 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. See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

  Note that if you sold or otherwise disposed of a debt instrument that is denominated in a currency other than USD or that makes a payment calculated by reference to the value of a currency other than USD, certain tax rules may require you to treat as ordinary income/loss all or a portion of your realized gain/loss.

  Consult your tax advisor for more information regarding reporting of transactions made in a foreign currency.

  Extraordinary dividends

  In general, an extraordinary dividend is a dividend which exceeds 10% of your tax basis in your stock. If you received a dividend deemed as an extraordinary dividend on stock held in your account, subsequent losses realized on the sale of such stock may be treated as long-term capital losses to the extent of the extraordinary dividend regardless of how long you held the stock. If you believe you received an extraordinary dividend, you may want to consult with your tax advisor or see IRS Publication 550, Investment Income and Expenses (PDF). This content will appear in a pop-up window.

  * Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for your tax reporting purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• Long-Term Realized Gain/Loss
  

  Due to IRS cost basis reporting rules, certain aspects of Fidelity's cost basis reporting have changed, beginning with tax year 2011. See the introductory portion of this guide for further information.

  Here is a summary of where you will find transaction information for various kinds of securities.

  Type of security	Location of cost basis information in your tax statement
  Equities Mutual funds and other securities in Dividend Reinvestment Plans Fixed-income securities without adjustments Short sales opened in 2011 or 2012 and closed during 2012	1099-B Only
  Foreign equities Foreign Fixed-income securities Domestic Fixed-income securities with cost basis adjustments	1099-B Additional information is also provided in the Realized Gain/Loss sections of the supplemental pages
  Options Short sales, opened prior to 2011 and closed in 2012 Foreign currency transactions	Realized Gain/Loss sections only

  The Long-Term Realized Gain/Loss section provides information that may be helpful when completing Form 1040, Schedule D. If this section appears on your report, refer to Helpful Hints for Completing Your 2012 Form 1040, Schedule D for more information.

  If you purchased a security in a foreign currency, then following its sale or disposition, this section provides both the cost in that currency and the estimated U.S. dollar (USD) cost basis* in the "Cost Basis" column (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase). If you sold a security in a foreign currency, this section provides 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. See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

  Note that if you sold or otherwise disposed of a debt instrument that is denominated in a currency other than USD or that makes a payment calculated by reference to the value of a currency other than USD, certain tax rules may require you to treat as ordinary income/loss all or a portion of your realized gain/loss.

  Consult your tax advisor for more information regarding reporting of transactions made in a foreign currency.

  Extraordinary dividends—In general, an extraordinary dividend is a dividend which exceeds 10% of your tax basis in your stock. If you received a dividend deemed as an extraordinary dividend on stock held in your account, subsequent losses realized on the sale of such stock may be treated as long-term capital losses to the extent of the extraordinary dividend regardless of how long you held the stock. If you believe you received an extraordinary dividend, you may want to consult with your tax advisor or see IRS Publication 550, Investment Income and Expenses (PDF). This content will appear in a pop-up window.

  *Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for your tax reporting purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• Currency Realized Gain/Loss
  

  This section of your statement provides information regarding certain transactions in which a customer disposes of foreign currency, namely exchanges of foreign currency for U.S. dollars (USD), exchanges of foreign currency for a security, and exchanges of foreign currency for a different foreign currency. It provides estimated cost basis*, proceeds, and gain/loss information for the currency disposed of in any of the foregoing transactions. Under certain tax rules, gain/loss realized on these types of transactions may be treated as ordinary income/loss.

  If you originally acquired the foreign currency in exchange for USD, then the estimated cost basis we provided in this section is generally that USD purchase price. If you originally acquired the foreign currency in exchange for another foreign currency, then we determined the estimated cost basis by converting the foreign currency purchase price into USD based on exchange rates on the trade date of the purchase. If you originally acquired the foreign currency in another type of taxable transaction (e.g., as proceeds from the sale of the security or as a dividend), then we determined the estimated cost basis by converting the foreign currency into USD based on exchange rates on the date of that earlier transaction.

  If you sold the currency in exchange for USD, then the proceeds in this section are those USD proceeds. If you used the foreign currency to purchase a security or another foreign currency, then we determined the proceeds by converting the disposed currency into USD based on exchange rates on the trade date of that transaction. For tax reporting purposes, you may be required to determine your actual USD cost basis, proceeds, and gain/loss based on the exchange rates on the settlement dates of the applicable transactions. Gains or losses from these types of currency transactions are generally reportable as ordinary income on Form 1040.

  See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

  * Fidelity will report gross proceeds as well as certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for your tax reporting purposes. Taxpayers should verify such information when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• State/Local Tax-Exempt Income from Fidelity Funds
  

  This section reports the amount of exempt interest dividends you received from Fidelity state-specific, tax-exempt funds that may be exempt from state and/or local income taxes, and the amount that may be taxable. For state tax-exempt information for Fidelity federal tax-exempt funds, in early January you will be able to see the Percentage of State Tax-Exempt Income letters on the Fidelity Fund-Specific Tax Information page.

• Municipal Original Issue Discount
  

  Municipal Original Issue Discount information for municipal bonds may be useful for updating the cost basis of any municipal bonds you may own that were originally issued at a discount to the face value of the bond. You may need to calculate your updated cost basis information, particularly if you sell your municipal bond prior to its maturity.

• Accrued Interest Paid on Purchases
  

  Accrued interest paid when a bond purchase settles is not taxable to the buyer; instead, it is income that is taxable to the seller. Your Form 1099-INT reports the full interest payment credited to your account. You should report the full amount of interest you were paid on Form 1040, Schedule B, Interest and Dividend Income, and list the accrued interest you paid when you purchased the bond on a separate line and subtract it from your interest income subtotal.

• Account Fees
  

  This section lists the fees paid in 2012 from your account. We have listed these fees with the same descriptions that we used in your monthly/quarterly statements. Any fee amounts preceded by a minus sign indicate a fee reversal which we made in your account (including ATM fee rebates you received in your Fidelity^® Cash Management Account).

• Actual Payment Shortfall
  

  Due to the IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of the actual payment shortfall incurred by your royalty trust and/or HOLDR's trust. Actual payment shortfall is the difference between the actual contingent payment and the projected contingent payment from contingent payment debt instruments. See your tax advisor for more information.

• Addition to Basis
  

  Due to the IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports your prorated share of addition to basis reported by your royalty trust and/or your HOLDR's trust. When the amount of principal reported exceeds the amount distributed to you, the difference is generally added to your cost basis.

• Administrative Expense
  

  Due to the IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports your prorated share of administrative expense incurred by your royalty trust and/or your HOLDRs trust. These expenses have not been deducted from the gross royalty income reported on forms 1099-DIV and/or 1099-MISC. These expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.

• Generic Expenses Subject to 2% Adjusted Gross Income (AGI) Limitation
  

  Due to the IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports your prorated share of generic expenses subject to the 2% AGI limitation incurred by your royalty trust and/or HOLDRs trust. These expenses are included in the gross royalty income reported on Forms 1099-DIV and/or 1099-MISC. These expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.

• Generic Expenses Not Subject to 2% Adjusted Gross Income (AGI) Limitation
  

  Due to the IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports your prorated share of generic expenses not subject to the 2% AGI Limitation incurred by your royalty trust and/or HOLDR's trust. These expenses are included in the gross income reported on Forms 1099-DIV and/or 1099-MISC. These expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.

• Margin Interest Paid
  

  Margin interest paid may be deductible as an investment expense.

• Proceeds Investment Expenses
  

  Due to IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports proceeds investment expenses incurred by your unit investment commodity trust.

  Note: Commodity trusts do not make cash distributions. We include these expenses as negative items in this section and as separate positive line items (labeled PRINCIPAL) in the proceeds amounts reported for this security on Form 1099-B. See your tax advisor for more information.

• Severance Tax
  

  Due to the IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports your prorated share of severance tax paid by your royalty trust and/or your HOLDRs trust. Severance taxes are commonly imposed by states on the extraction of natural resources to be used out of state. We include these expenses in the royalty income reported on Forms 1099-DIV and/or 1099-MISC, because we are required to report gross income without deducting expenses. These expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.

• Tax-Exempt Interest Investment Expenses
  

  Due to IRS reporting requirements for widely held fixed investment trusts (WHFITs), this section reports tax-exempt interest investment expenses incurred by your unit investment trust. These expenses are not included in the investment expenses listed on Form 1099-DIV, Line 5 or on Form 1099-INT, Line 5. They are included in the tax-exempt interest amount reported (Line 8). For this reason, the reported gross tax-exempt interest amounts may be higher than the amounts that you actually received. Under certain circumstances tax-exempt interest investment expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.