Mr. and Mrs. Able are investors in a mutual fund that is not part of a qualified retirement plan. For the current year, the fund notified them that it had allocated a $9,500 long-term capital gain to their account. Of this total, only $4,500 was distributed in the current year. In addition, the fund paid $500 in federal income taxes on their behalf. What is the amount of long-term capital gain that the Ables should report on their current-year tax return?

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Urijah Johns

24 June, 13:17

Mr. and Mrs. Able are investors in a mutual fund that is not part of a qualified retirement plan. For the current year, the fund notified them that it had allocated a $9,500 long-term capital gain to their account. Of this total, only $4,500 was distributed in the current year. In addition, the fund paid $500 in federal income taxes on their behalf. What is the amount of long-term capital gain that the Ables should report on their current-year tax return?

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Jamya Chung · Answer 1

Answer and Explanation:

Dividends are received on top of investments made under the mutual fund company. Credit is not allowed on any type of capital gains from the Mutual Fund under the rules, hence the capital gains of Mr. & Mrs. Able should be reported on their current year long-term gains So, $9500 will be reported for the current year tax return.