Why am I taxed on certain mutual fund distributions paid in January 2005?
Unlike cash dividends from individual securities, which are typically taxed in the year the dividends are paid, mutual fund distributions declared as payable to shareholders of record in October, November or December, and paid prior to February 1 of the following year are taxable to shareholders based on the record date, not when paid. For example, mutual fund distributions with a record date in December 2004, and paid in January 2005, are reported and taxed as 2004 dividend distributions.
