I was wondering about the differences between 1099-DIV and 1099-B forms.
In the case of mutual funds,
- Is 1099-DIV for reporting investment income due to trading of the securities in a mutual fund, instead of trading of the fund shares by the shareholder?
- Is 1099-B for reporting investment income due to trading of the fund shares by the shareholder, instead of trading of the securities in a mutual fund?
- Why do we have to separately report different types of investment incomes in 1099-DIV and in 1099-B forms? Is it because they are subject to different ways of calculating taxes?
- Within 1099-DIV, if I understand correctly, short term capital gain is reported as part of dividend, separately from long term capital gain. Does it mean dividend is taxed at a higher rate than long term capital gain?
Thanks and regards!