Reporting Capital Gain DistributionsPayers report capital gain distributions on box 2a of Form 1099-DIV. Capital gain distributions are also called capital gain dividends. Question: Are capital gains and capital gain distributions the same thing? Answer: No. A capital gain occurs when the owner of a mutual fund (or capital asset) sells shares in the fund (or property) for more than its cost and realizes a profit. A capital gain distribution occurs when the mutual fund sells assets for more than their cost and distributes the realized gain to the shareholders. If taxpayers actually sold mutual fund shares, or other shares of stock, refer them to a VITA/TCE tax preparer with advanced certification. |