- 4 -
rates set forth in section 1(h). It has been held that,
consistent with this statutory mandate, the Form 1040, Individual
Income Tax Return, and its schedules “ensure that capital gain
distributions are taxed.” Torre v. Commissioner, T.C. Memo.
2001-218, affd. 52 Fed. Appx. 965 (9th Cir. 2002).
Aside from petitioner’s bare assertions, nothing in the
record indicates that any amount of the distribution represents a
return of capital. Rather, the record indicates that the
distribution was a capital gain dividend. On the yearend
statement, Vanguard reported the $7,118.80 as “long-term gains”.
Vanguard multiplied petitioner’s 955.543 shares by long-term
capital gain cash of $7.45 to calculate the $7,118.80
distribution. Further, on the Form 1099-DIV, Vanguard reported
the $7,118.80 as a capital gain distribution, rather than as a
nontaxable distribution. Significantly, subsequent to the
distribution, petitioner’s total cost basis and the number of
shares owned remained unchanged. Petitioner admitted these facts
during trial.
Petitioner contends that the $15,097.58 decrease in his
account value, from $41,518.34 to $26,420.76, resulted in a
“capital loss”. He then alleges that $5,494 of the $7,118.80
distribution was a return of capital. Realistically, the
decrease in petitioner’s account value was due to the decrease in
share price from $43.45 per share on February 10, 2000, to $27.65
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011