Tax Documents to Expect Cost Basis Reporting
PIMCO Funds Dividend and Capital Gains Distributions Frequently Asked Questions

 

Tax Documents to Expect

This section lists the most commonly used tax forms issued to shareholders of PIMCO mutual funds, and describes each form, its purpose, and the mail date for sending the form.

Below is a list of tax forms that will be mailed to certain shareholders of PIMCO funds during the year. Depending on the type of account you hold, the fund(s) that you hold, your residence, the transactions made during the calendar year, and other account specific factors, you may receive one or more of the following tax forms.

Internal Revenue Service Tax Form

Purpose of Federal Tax Information Form

PIMCO Mail Date

Form 1099-DIV Used to report ordinary income distributions (including distributions of net short-term capital gain) and long-term capital gain dividends paid in calendar year 2011

January 31, 2012
Form 1099-INT Used to report municipal bond fund tax-exempt income dividend distributions paid in calendar year 2011

January 31, 2012
Form 1099-B Used to report gross sales proceeds from redemptions, exchanges, and systematic withdrawals of fund shares in calendar year 2011

January 31, 2012
Form 1099-R Used to report distributions from tax qualified retirement plans in calendar year 2011

January 31, 2012
Form 1042-S Used to report distributions paid and any tax withholding with respect to beneficial owners who are either nonresident alien individuals or foreign entities

March 15, 2012
Form 5498 Used to report contributions to and rollovers from tax qualified retirement plans

May 31, 2012

 

Cost Basis Reporting

Beginning January 1, 2012 mutual funds are required to report cost basis information to investors and the Internal Revenue Service. Learn More.

PIMCO Funds Dividend and Capital Gains Distributions

Mutual funds realize gains and losses throughout the year as securities in the portfolio are bought and sold at a gain or loss. Funds are required by law to distribute net gains from such transactions, as well as any dividends or interest paid by a security, before the end of the year. These distributions are taxable events, unless a fund is held in a tax-qualified account.

The PIMCO Funds distribution calendar and other distribution-related documents can be found on the Tax Information homepage under the applicable year.

Frequently Asked Questions

How do capital gains affect fund distributions?
Mutual fund capital gains generally arise when securities are sold within a fund portfolio. These capital gains are passed on to shareholders as required fund distributions of short-term or long-term capital gains.

What are short-term capital gains?
Short-term capital gain characterization results when the sold security is held for a time period of one year or less. A fund distribution of such short-term capital gain is generally treated as ordinary income subject to Federal ordinary income tax rates. The short-term capital gain distribution is included in Box 1a of the 2011 IRS Form 1099-DIV.

What are long-term capital gains?
Long-term capital gain characterization results when the sold security is held for a time period over one year. A fund distribution of long-term capital gain is treated as income subject to Federal income tax at a maximum15% rate through December 31, 2012. The long-term capital gain distribution is included as a capital gain distribution in Box 2a of the 2011 IRS Form 1099-DIV.

What are ordinary income distributions?
Ordinary income dividends are paid by a fund generally from tax basis net investment income (certain gains from derivatives and foreign currency can be classified as ordinary income as well). Ordinary income distributions are subject to Federal ordinary income tax rates. The ordinary income dividends paid by a fund (as well as any short-term capital gain distributions) are included in Box 1a of the 2011 IRS Form 1099-DIV.

How are ordinary income distributions classified as Qualified Dividend Income (QDI) taxed?
Certain dividends paid from U.S. corporations or from foreign corporations domiciled in a country having a tax treaty with the U.S., are generally subject to the Federal long-term capital gain tax rate of 15%, provided certain holding period requirements are met. When paid by a Fund to shareholders, this QDI income is included in Box 1b of the 2011 IRS Form 1099-DIV.

What are exempt-interest dividend distributions?
Exempt-interest dividend distributions are paid by municipal bond funds that earn tax-free interest income. Such amounts are exempt from Federal income tax, and are included in Box 8 of the 2011 IRS Form 1099-INT. Although such exempt-interest dividend distribution amounts are free from Federal income tax, any portion of such distributions arising from “private activity bonds” may be subject to the Federal alternative minimum tax; any such amount is included in Box 9 of the 2011 IRS Form 1099-INT.

How do distributions affect share values?
The Fund’s net asset value (NAV) drops in direct relationship to the distribution paid, plus or minus any market movement. For example, if a Fund has a $10 NAV and pays a 25-cent distribution, the stated NAV will be $9.75 (that figure would rise or fall with any market movement). However, because shareholders receive either a cash distribution or additional shares through reinvestment, the total value of their accounts will not change (absent market movement). In our example, the total value associated to each share will still be worth $10 — $9.75 NAV, plus either 25 cents in cash or additional shares. Distributions will vary on a per-share basis, based on the underlying share class.

What is the difference between record date, ex-dividend date and payable date for dividend and capital gains distributions?
Record Date – All shareholders of record at 4 p.m. Eastern on this day are eligible to receive the distribution. This date is usually the business day prior to the ex-dividend date.

Ex-Dividend Date – The date on which the distribution amount per share is deducted from the fund’s net asset value (NAV) per share. Purchases on or after this date will not be eligible to receive the distribution. Also known as the declaration date, the ex-dividend date, is generally the business day after the record date.

Payable Date – The fund pays shareholders their proportional shares of the distribution on this date. For PIMCO mutual funds, the payable date for distributions paid in cash is normally the same business day as the ex-dividend date, except for those funds with daily income distributions. PIMCO fund shares purchased with reinvested distributions usually are credited on the reinvestment date at the fund's 4 p.m. net asset value (NAV) for that date.

For additional information, please contact a Client Service Representative:

A,B,C,D and R Shares: 800.426.0107
Institutional, Administrative and P shares: 800.927.4648

The above discussion is intended for general informational purposes and is not intended to constitute tax advice. For specific tax advice, or information on how federal, state, local or non-U.S. tax laws may apply to you, consult your tax advisor.
Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus and summary prospectus, if available, which may be obtained by contacting your investment professional or PIMCO representative.  Click here for a complete list of the PIMCO Funds prospectuses and summary prospectuses. Please read them carefully before you invest or send money.

Tax Information