I have a MVO distribution tax question:
last year (year 2011), my brokerage reported my MVO distribution as 1099-div, this year (2012), they reported as 1099-misc, is one of the them wrong ? or both may be correct ?
In any case, to answer the question, the tax booklet way will be the most advantageous. If the broker has the full distribution shown as 1099-MISC that would mean ordinary income tax rates for the whole thing. If you use the tax booklet calculation around half will be return of principal and not taxed at all.
So doing the correct way is best from the monetary point of view also.
"which way has the tax advantage, MVO tax booklet or 1099-misc?"
I recommend do it the correct way which means use the tax booklet.
After all, if you follow the incorrect 1099, file your taxes and then the broker sends you a revised 1099 you will have to do a revised tax return.
You can always call your broker and tell them its wrong and refer them to the tax booklet.
If they won't do it correctly, then include a note with your return explaining it.
Thanks for the input, Liza.
the broker may or may not issue a revised 1099. in that case, will it be acceptable that I calculate using MVO tax booklet based on that incorrect 1099-misc or I have to get them to issue a revised 1099 before file a return ?
btw: which way has the tax advantage, MVO tax booklet or 1099-misc?