Tax Q&A: Distribution Difficulties

To make the calculations, determine your original share purchases. You'll then need to add the amount of dividends you reinvested back into the fund, says Stein. The sum of those amounts -- the original cost of your fund shares plus the amount of reinvested dividends -- is your "cost basis" in the fund.

If you paid commissions to buy those shares, be sure to subtract those fees from your total cost basis.

Next, determine the amount you received from the sale of your fund shares and subtract any commissions. The difference between the amount you received from the sale and your total cost basis is your overall capital gain or loss. That amount should be reported on Schedule D.

Whew. That's way too much math.

But let's all learn a lesson here and never have to do this again. Going forward, be sure to keep all your trade records or create a spreadsheet of your own detailing how many shares you purchased, the purchase price and the date you bought them. Then you'll be much better prepared when you decide to sell.

If the gain on the sale of my house is less than $250,000, do I have to report it on Schedule D anyway, even though I won't owe tax on it? -- G. C.

People must've done a ton of buying and selling homes last year, because the questions keep coming!

The home-sale exclusion rules say that you won't owe tax on any gain from the sale of your home up to $250,000 as a single person and $500,000 as a married couple, as long as you lived there as your primary home for two of the last five years.

So if your gain doesn't exceed that amount, there is no need to report it, says Mark Luscombe, a principal federal tax analyst with CCH, a provider of tax and business law information.

So that's one less thing to worry about this tax season!

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