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Path: utzoo!watmath!clyde!bonnie!wjh
From: wjh@bonnie.UUCP (Bill Hery)
Newsgroups: net.invest
Subject: Re: Mutual fund taxation
Message-ID: <612@bonnie.UUCP>
Date: Thu, 7-Nov-85 22:55:28 EST
Article-I.D.: bonnie.612
Posted: Thu Nov  7 22:55:28 1985
Date-Received: Fri, 8-Nov-85 22:11:09 EST
References: <1599@uwmacc.UUCP>
Organization: AT&T Bell Laboratories, Whippany NJ
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> .........................................................Is it
> really true that stock market mutual fund earnings do not qualify
> for the $200 (?) dividend deduction?  

In a common stock the earnings the mutual fund had will be in
qualifying dividends (regular dividends), long term capital gains, 
short term capital gains, and non-qualifying dividends (e.g., from
interest).  They should report to you your pro rata share of these
categories, and you report them to the IRS as such.  Thus, the
qualifying dividend portion can be excluded up to the $200 limit,
and the l.t. capital gains taxed at the lower rate.  This is based
on my experience with a few funds and myown reading of IRS and other
publications.  I've had no problems reporting to IRS this way.