Frequently asked questions

While preparing your taxes, you may have a number of questions. Delaware Investments provides answers below to many frequently asked questions, which may help you file your taxes. Please consult a tax advisor for specific questions related to your tax preparation.

What if I have additional questions?

If you have additional questions that we are unable to answer here, or have questions relating specifically to your tax situation, please contact your tax advisor.

Account Access

What is the Delaware Investments online Account Access feature?

Account Access is a user ID/password-protected area of the Delaware Investments® website that gives you access to your account information and lets you perform account transactions online. For more information, visit the Delaware Investments website or call our Shareholder Service Center at 800 523-1918 weekdays between 8:30 a.m. and 6:00 p.m. Eastern time, or register for Account Access now.

How do I sign up for the Delaware Investments online Account Access feature?

You may register online for Account Access now.

Who can I contact if I have questions about the Delaware Investments online Account Access feature?

Call the Delaware Investments Shareholder Service Center at 800 523-1918. Customer service representatives are available to assist you weekdays from 8:30 a.m. to 6:00 p.m. Eastern time.

What information do I need to sign up for Account Access?

To sign up for Account Access, you will need your Social Security number and an account number from any one of your Delaware Investments accounts. (You can find your account number on your investment update statement.) Account Access will ask you to create a user ID and password.

What if I forget my user ID for online Account Access?

Account Access features a "Retrieve user ID" function that enables shareholders to recover a lost or forgotten user ID. Call the Delaware Investments Shareholder Service Center at 800-523-1918. Representatives are available to assist you weekdays from 8:30 a.m. to 6:00 p.m. Eastern time.

Statement information

When will my 2013 annual account statement arrive?

Your 2013 year-end account statement should arrive in mid-January 2014.

Can I use the information on my last account statement of the year to file my tax return?

No. Your account statement reports distributions for financial accounting purposes, which may differ from the information required for federal tax purposes. For example, certain distributions declared in December to shareholders of record in such month, but paid in January, are taxable as if they were paid in December.

Tax forms you may receive

When will my 2013 tax forms arrive?
Form Anticipated arrival
IRS Forms 1099-R, 1099-Q Early February 2014
IRS Form 1099-B, 1099-DIV Mid-February 2014
IRS Form 1042-S Mid-March 2014
IRS Form 5498-ESA (for CESAs) Early May 2014
IRS Form 5498 (for all IRAs) Early June 2014
Can I access my tax forms online?

Yes, you may access your tax forms by logging on to Account Access.

How can I get a duplicate of my tax form?

Contact the Delaware Investments Shareholder Service Center at 800 523-1918, weekdays from 8:30 a.m. to 6:00 p.m. Eastern time.

What if my Social Security number / taxpayer identification number is incorrect on my tax forms?

Please contact our Shareholder Service Center at 800 523-1918, weekdays from 8:30 a.m. to 6:00 p.m. Eastern time.

Why didn't I receive a tax form for my IRA transfer of assets?

An IRA transfer to an IRA is a nonreportable event.

How should I report the amounts from the tax forms on my personal income tax form?

Please contact your tax advisor to assist you with this process.

IRS Form 1099-DIV and 1099-B

Will I always receive IRS Form 1099-DIV?

IRS Form 1099-DIV is used to report all dividends and capital gains distributions paid to you (cash or reinvested) by your Delaware Investments funds on non-retirement accounts.

You will not receive IRS Form 1099-DIV if any of the following apply to you:

  • Your total dividends for a fund are less than $10.
  • Your fund did not pay a distribution.
  • Your account is a retirement account.
Why did I receive an IRS Form 1099-DIV for a tax-exempt fund?

Tax-exempt interest income now appears on Form 1099-DIV rather than 1099-INT.

Why have I not received my IRS Form 1099-DIV/B?

IRS Form 1099-DIV/B will not be mailed if your fund has not paid a taxable distribution or if a redemption did not occur.

If, however, your fund has paid a taxable distribution and you have not received your forms, contact our Shareholder Service Center at 800 523-1918, weekdays from 8:30 a.m. to 6:00 p.m. Eastern time.

The amount of my foreign tax paid on IRS Form 1099-DIV exceeds the $300 maximum threshold ($600 if married filing jointly) for reporting the credit directly on Form 1040. Where do I start my paperwork?

You will need to complete IRS Form 1116. Enter RIC on line g and report all income in Part I and all foreign tax passed through in Part II.

For more information on the tax credit and deduction alternative, please consult a tax advisor or see IRS Publication 514, Foreign Tax Credit for Individuals.

I received an IRS Form 1099-DIV for my non-IRA investments, but not for my IRA. Why is that?

IRS Form 1099-DIV is used to report taxable dividends and capital gains. Capital gains and dividends paid to IRA accounts are tax deferred and do not generate reporting.

An IRS Form 1099-R will be mailed to you only when you receive a cash distribution from your IRA(s).

I do not have a cost basis on my IRS Form 1099-B. Why?

Delaware Investments is required to provide cost basis information for shares purchased on or after Jan. 1, 2012 only. See Cost basis requirements. Additionally, cost basis information may not be provided to you if:

  • You had no sales or exchanges.
  • Your account is a retirement or money market account.
  • Your account was opened prior to 1993.
  • Your account was transferred from another account prior to 1999.
  • Your account was established as a result of a fund conversion.
Why did I receive a Form 1099-B for my corporate account?

Beginning in 2012, Delaware Investments is required to report sales and redemptions of securities for S corporations.

Distributions

How are taxable mutual fund distributions reported?

Mutual fund distributions are reported on IRS Form 1099-DIV. Look for this form to arrive by the middle of February 2014.

What is meant by the record date for a distribution?

This is the date that is used to determine who is eligible to receive a distribution issued by the fund. Shareholders holding shares on the record date are eligible to receive the distribution. Shareholders who purchased their shares after the record date will not receive the distribution.

What is meant by the ex-date for a distribution?

This is the date that the distribution of dividends or capital gains is deducted from a mutual fund's assets and set aside for payment to shareholders.

I earned dividends but did not get a Form 1099-DIV. Why?

IRS Form 1099-DIV will not be mailed if your fund has not paid any taxable distributions, if your total dividends for a fund are less than $10, or if distributions were made to you from a retirement account.

If you have any questions about whether your dividends are taxable, contact our Shareholder Service Center at 800 523-1918, weekdays from 8:30 a.m. to 6:00 p.m. Eastern time.

What is qualified dividend income?

When the fund receives dividends from domestic corporations and qualified foreign corporations, they are considered qualified dividend income.

For 2013, qualified dividend income is taxed at rates of 0%, 15%, or 20% depending on your taxable income bracket.

Please refer to the 2013 IRS Form 1040 instructions for more details.

What is a capital surplus/return of capital?

A return of capital dividend (for tax purposes) is a distribution in excess of tax basis of earnings or profits. These return of capital distributions generally are not taxed, and reduce your original cost basis. If return of capital distributions reduce your cost basis to zero, any excess will be viewed as capital gain distributions that are taxable.

Capital gains

What is a capital gain?

Profits resulting from the sale of securities are considered capital gains. Investors may realize capital gains when they sell shares, the fund sells securities, or when both occur.

If the fund sells securities and realizes a capital gain, these gains are passed to the shareholders as distributions. When you sell or exchange mutual fund shares, you may realize a short- or long-term taxable capital gain or a capital loss. IRS Forms 1099-DIV and 1099-B are used to report these amounts.

Remember that under federal tax law, shares held for more than one year receive long-term capital gain/loss status. Shares that are held for one year or less are treated as a short-term capital gain or loss.

Do I still pay taxes on capital gains even if I have them reinvested?

Capital gains in shares held in an IRA, 401(k), or any other tax-deferred investment are not taxed. All other capital gains distributions are taxable, even when reinvested.

What is considered a long/short-term capital gain?

Short-term capital gains occur when there are gains from the sale of securities that are held for one year or less. For federal tax purposes, these gains are taxed as ordinary income. Short-term gains are taxed as ordinary income at your marginal tax rate ranging from 10% to 39.6% under federal income tax rules. An additional 3.8% Medicare tax may be imposed on certain net investment income (including ordinary dividends and capital gain distributions received from a mutual fund and net gains from redemptions or other taxable dispositions of mutual fund shares) to the extent the recipient’s gross income exceeds a threshold amount.

Long-term capital gains occur when there are gains from the sale of securities that are held for more than 12 months. Long-term capital gains from sales will be taxed at 0%, 15%, or 20% for taxable accounts. An additional 3.8% Medicare tax may be imposed on certain net investment income (including ordinary dividends and capital gain distributions received from a mutual fund and net gains from redemptions or other taxable dispositions of mutual fund shares) to the extent the recipient’s gross income exceeds a threshold amount.

Long-term capital gains paid from a REIT attributable to unrecaptured Section 1250 gain is taxed at 25%.

Why do I have a capital gain distribution when my fund value is down?

The fund may have realized a capital gain from selling securities within the portfolio of the fund, which must be distributed to the shareholders even though the overall value of the fund may be down.

Cost basis

How do I determine the cost basis on the shares I sold?

Cost basis generally is the price you paid for your shares, including any sales charges.

Your cost basis may not be the same for all shares since the price may have varied if you made purchases at different times. Shares you acquired through reinvested dividends or capital gains are also considered separate purchases and should be included in your calculations.

For a detailed explanation of cost basis reporting, see Cost basis requirements.

What method does Delaware Investments use to calculate cost basis?

Delaware Investments uses the average cost method by default. However, you should consult your tax advisor to determine if the average cost method is the most suitable for you. See Cost basis requirements.

IRAs

I received an IRS Form 1099-DIV for my non-IRA investments, but not for my IRA. Why is that?

The IRS Form 1099-DIV is used to report taxable dividends and capital gains. Capital gains and dividends paid to IRA accounts are tax deferred, and they do not generate reporting.

An IRS Form 1099-R will be mailed to you only when you receive a cash distribution from your IRA(s).

Why didn't I receive a tax form for my IRA transfer of assets?

An IRA transfer of assets to an IRA is a nonreportable event.

Deductions

How do I take a tax deduction for foreign taxes paid?

List the amount of foreign taxes paid reported on your IRS Form 1099-DIV with any other deductions on line 8 of IRS Form 1040, Schedule A.

If you received more than one IRS Form 1099-DIV, combine the foreign tax paid and enter the total on Schedule A.

Please note that you must itemize in order to take a foreign tax deduction.

A foreign tax deduction is not available if you use the standard deduction.

Can I take a foreign tax credit or deduction if my account is a tax-sheltered plan?

No. Because earnings from a tax-qualified plan are not taxable until withdrawn, any foreign taxes paid within a tax-sheltered plan are not eligible for a tax credit or deduction.

The information contained in the Tax Center is not intended to be legal or tax advice. If you need assistance preparing your tax return, please consult a tax advisor.

Information may be abridged and therefore incomplete. Any discussion pertaining to taxes in this communication (including attachments) may be part of the promotion or marketing of a product. As provided for in government regulations, advice (if any) related to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Individuals should seek advice based on their own particular circumstances from an independent tax advisor.