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How do I Read My 1099

1099 Information Guide

The 1099 form from Acorns lists important information like realized gains or losses from your investments, income from dividends and any foreign taxes paid on your investments.
We created this 1099 Information Guide to help you understand the form and how it relates to your taxes. Acorns does not provide tax advice. This information is for informational purposes. Please consult a tax professional for guidance.

Dividends and Distributions (1099-DIV, Summary and Detailed)

Line 1a: Total ordinary dividends

Ordinary dividends are the most common type of distribution and are paid out of the earnings and profits of the issuer. Line 1a includes Line 1b (Qualified dividends).

Line 1b: Qualified dividends

Qualified dividends are ordinary dividends that may be eligible for a lower tax rate than ordinary dividends. But there are certain holding period requirements that must be met to be eligible for this lower tax rate. Acorns will report a dividend as qualified if it has been paid by a U.S. or qualified foreign corporation and it is readily tradable on a U.S. exchange. Acorns will not determine if applicable holding periods have been met. You will need to consult with a qualified tax advisor for guidance. Qualified dividends are included in the amount reported on

Line 1a. Distributions paid by RICs and REITs are not considered qualified and will be

reported only on Line 1a, as ordinary dividends.

Line 2a: Total capital gain distributions

Capital gain distributions are paid by mutual funds or other regulated investment companies (RICs) and Real Estate Investment Trusts (REITs). These are not capital gains from selling or trading stock or securities within your account. These are distributions paid from the issuer.

Acorns follows IRS de minimus rules (i.e. not enough to be considered) for 1099 reporting. If the gross proceeds from fractional sales of securities or the cumulative amount of income or dividends received during the tax year do not exceed the IRA reporting thresholds, we do not include these amounts on the 1099 and they are not reported to the IRS. Since tax law is complex, contact an IRS representative or your tax advisor for guidance on your circumstances.

2b: Unrecaptured Section 1250 Gain

This refers to gains from depreciable real property passed to shareholders from a RIC or REIT.

Line 3: Non-dividend distributions

Non-dividend distributions are distributions that are not paid out of the earnings and profits of a corporation or mutual fund. These are also referred to as a return of capital (ROC) and reduce the cost basis in the security. It is not taxed until the basis in your security is recovered.

Line 4: Federal income tax withheld

Federal income tax withheld represents any U.S. taxes withheld from the distributions. This could be a result of a restriction on the account. This is not a foreign withholding.

Line 5: Investment expenses

Investment expenses includes your share of expenses of non-publicly offered RICs.

Line 6: Foreign tax paid

If applicable, foreign tax paid on dividends and other distributions on stocks is reported here.

Line 7: Foreign country or U.S. possession

This is the name of the foreign country or U.S. possession for which the foreign tax was paid. This section will list “various” if there is more than one applicable country. Details for each transaction and all countries will be listed on the “Foreign Income and Taxes Summary” page.

Lines 8 and 9: Cash liquidation distributions and non-cash liquidation distributions

Liquidating distributions are payments received during a partial or complete liquidation of a corporation. These distributions can be either cash or noncash and are at least in part a return of capital. Cash liquidation distributions are reported on Line 8. Non-cash liquidation distributions are reported on

Line 9.

Summary of Proceeds, Gains & Losses, Adjustments and Withholding

General Overview

Your 1099-B is divided based on the terms of sale and on IRS reporting requirements for brokers. For example, all short-term transactions involving Acorns follows IRS de minimus rules (i.e. not enough to be considered) for 1099 reporting. If the gross proceeds from fractional sales of securities or the cumulative amount of income or dividends received during the tax year do not exceed the IRA reporting thresholds, we do not include these amounts on the 1099 and they are not reported to the IRS. Since tax law is complex, contact an IRS representative or your tax advisor for guidance on your circumstances covered securities will be reported in one section, and all short-term transactions involving non-covered securities will be reported in another section. Your cost basis is tracked on a lot-by-lot basis, so it is possible for one sale to be split between each section, because the lots sold were purchased on different dates.

You may need to review all sections of your 1099-B if you are trying to reconcile a single transaction.

• The transactions section provides a summary of Proceeds, Cost basis, Gains/losses, and other adjustments such as Wash sale adjustments and Market discount.

• The transactions are grouped into three categories: Short-term, Long-term, and Undetermined.

Short-Term Proceeds reported

Shows total Proceeds from short-term transactions for which cost basis is reported to the IRS.

Total short-term Proceeds

Shows total proceeds from short-term transactions for which cost basis is not reported to the IRS. Proceeds, however, are reported to the IRS. Cost basis, Market discount and Wash sale adjustment may be shown in for informational purposes

Long-Term Proceeds reported

Shows total Proceeds from long-term transactions for which cost basis is reported to the IRS.

Total Long-term Proceeds

Long-term transactions are also based on whether the cost basis is reported to the IRS, not reported to the IRS, or if Form 1099-B is issued for transactions that have long-term holding periods.

Market discount

Reports the Market discount.

Wash sale loss disallowed

Reports Wash sale loss disallowed for short-term transactions. Under IRS rules, investors cannot recognize losses when selling a security and repurchasing the same security within a short period of time. The wash sale window starts 30 days prior to the sale, includes the date of sale, and ends 30 days after the sale, for a total of 61 days.

Net gain or loss

Shows net gain or loss on the short-term transactions for which cost basis is reported to the IRS and is the difference between Proceeds and Cost Basis including Market discount (subtract) and Wash sale adjustment (add).

Acorns follows IRS de minimus rules (i.e. not enough to be considered) for 1099 reporting. If the gross proceeds from fractional sales of securities or the cumulative amount of income or dividends received during the tax year do not exceed the IRA reporting thresholds, we do not include these amounts on the 1099 and they are not reported to the IRS. Since tax law is complex, contact an IRS representative or your tax advisor for guidance on your circumstances.

Grand Total

Shows the total Proceeds, total Cost basis, total Market discount, total Wash sale loss disallowed, total Net gain or loss for the transaction for all the holding periods including the cost basis being reported and cost basis not being reported to the IRS.

Tax Resources

Tax questions for individuals: 1-800-829-1040

Tax questions for businesses: 1-800-829-4933

Other tax forms or publications: 1-800-829-3676

Pay taxes by credit card: 1-888-272-9829

For additional information and to print forms and publications: http://www.irs.gov/

If you have any other questions, feel free to reach out to our support team.

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