This should be easy question - but new to equity investing outside of TSAs. Statement from Manning and Napier (EXTAX) shows a small "qualified dividend" paid in 2012. I realize this is taxable. Another column shows "total capital gains distributions" (much larger amount). Is it also subject to taxes now? - FYI: I made systematic contributions during 2012. I DID NOT sell any of the fund or otherwise withdraw assets. Thanks.
Comments
Here's the IRS 1099-DIV template form and instructions: http://www.irs.gov/pub/irs-pdf/f1099div.pdf
Box 1b is qualified dividends, and the amount there is included in the total ordinary dividend amount (box 1a). The qualified dividends are taxed at 15% (or less) and go into line 9b of Form 1040. (Box 1a goes into line 9a.)
Mutual funds generally pay everything out in the form of dividends that you reinvest (usually automatically) or take as cash. As Maurice said, these are taxable in a taxable account.
Some of those dividends represent your share of dividends paid by the underlying stocks held by the fund, and also short term capital gains recognized by the fund (when it sold underlying securities). This is what goes into box 1a on the 1099-DIV. Other dividends represent long term capital gains recognized by the fund. This is what goes into box 2a ("total capital gains distributions"), and is reported on line 13 of Form 1040. They're taxed as capital gains, even though the fund distributes them as fund dividends (and thus reports them on 1099-DIV).