Help Mutual funds realize gains and losses throughout the year from the sales of the securities held in their portfolios.
Tax laws require distribution of the net gains to their shareholders before the end of each year.
Distribution of a net gain may occur even if the fund's share price declined due to market volatility. A fund's share price declines by the amount of the distribution when a capital gain distribution is paid. Important information about capital gains. Capital gains are reported on Form 1099-DIV which is mailed to you in late January. You need this information to calculate and report your capital gain distributions and other tax liabilities.