Schwab One® Account of Account Number TAX YEAR 2012 DANA JONES 1111-9999 FORM 1099 COMPOSITE JOHN JONES & YEAR-END SUmmary Date Prepared: January 11, 2013 Recipient’s Name and Address Your Consultant JOHN Q. ADVISOR DANA JONES VP–FINANCIAL CONSULTANT JOHN JONES 1 (907) 263-2345 C/O sampLE GLOBAL ENTERPRisE [email protected] 3RD FLOOR, SUITE 1800 1234 maiN STREET ANYTOWN, US 12345 Items for Attention Important Official IRS Form(s) 1099 Enclosed • PLEASE NOTE: Some companies have not confirmed the final status of The report in this package contains your income tax return documents their distributions for tax reporting at this time. Revised Forms 1099 and year-end summary. Please retain this package for tax preparation will be issued should Schwab receive updated information from these purposes. companies. For tax advice, please consult with a qualified tax advisor, CPA, or • Please refer to the enclosed insert(s) for additional information. financial planner. To contact Schwab: SAMPLEIf you have any questions or need additional information about your Form(s) 1099 or your year-end summary, please call 1-800-435-4000, 24 hours a day, 7 days a week. We’re always here for you. To contact the IRS: Tax questions for individuals: 1-800-829-1040 Tax questions for businesses: 1-800-829-4933 To order tax forms or publications: 1-800-829-3676 To pay taxes by credit card: 1-888-272-9829 For additional information and to print forms and publications, visit www.irs.gov. Please note: Any investment shown in this guide is hypothetical and is not intended to reflect the share price of any existing company. Values and calculations on the report may not be an accurate reflection of the transactions and balances that appear on the report. All figures used are for illustrative purposes only. ©2012 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. 101 (0712-4872) Page 1 of 48 Schwab One® Account of Account Number TAX YEAR 2012 DANA JONES 1111-9999 FORM 1099 COMPOSITE JOHN JONES & YEAR-END SUmmary Date Prepared: January 11, 2013 Your Form 1099 Composite may include the following Internal Revenue Service (IRS) forms: 1099-DIV, 1099-INT, 1099-MISC , 1099-B and 1099-OID . You’ll only receive the form(s) that apply to your particular financial situation and please keep for your record . Please note that information in the Year-End Summary is not provided to the IRS . It is provided to you as additional tax reporting information you may need to complete your tax return . Table of Contents Page Table of Contents Page FORM 1099 COMPOSITE Non-Mortgage Widely Held Fixed Investment Trusts ..................38 Form 1099–DIV . 3 Section 1231 Gain .........................................38 Form 1099–INT . 6 Addition to Basis ..........................................38 Form 1099–MISC . 8 Reduction to Basis .........................................38 Form 1099–OID . 10 Tax-Exempt Interest Investment Expense . .39 Form 1099–B . 12 Generic Expense (Subject to 2% AGI Limit) . .39 Notes for your Form 1099-B ..................................19 Generic Expense (Not Subject to 2% AGI Limit) .....................39 YEAR-END SUMMARY Investment Interest Expense ..................................39 Interest & Dividends . 20 Gross Proceeds Investment Expense . .40 Detail Information of Dividends and Distributions . .20 Severance Tax ............................................40 Detail Information of Interest Income ............................24 Administrative Expense ......................................40 Accrued Interest Paid on Purchases .............................26 WHFIT Miscellaneous Income .................................40 Realized Gain or (Loss) . 27 Amortization and Accretion Reporting for Fixed Income . 41 Short-Term Realized Gain or (Loss)..............................27 Amortization and Accretion ...................................41 Long-Term Realized Gain or (Loss) . 30 Supplemental Information . 42 Realized Gain or (Loss) Summary .............................SAMPLE 33 Partnership Distributions.....................................42 Notes for Your Realized Gain or (Loss) . .34 Principal Payments . .42 Options Activity . 35 Detail Information of Miscellaneous Income .......................43 Investment Activity for Options.................................35 Municipal Bond Original Issue Discount . 44 Summary of Fees & Expenses . 36 Specified Private Activity Bond Interest...........................44 Fees ...................................................36 Negative Original Issue Discount ...............................44 Margin Interest............................................36 Contract Fees.............................................45 UIT (Unit Investment Trust) Organizational Expense ..................36 Option Premiums ..........................................45 ADR (American Depositary receipt) Fees..........................36 Cost Basis Disclosure . 46 Widely Held Fixed Investment Trusts (WHFIT) Reporting . 37 Terms and Conditions . 48 Unit Investment Trusts ......................................37 Widely Held Mortgage Trusts ..................................37 ©2012 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. 101 (0712-4872) Page 2 of 48 Schwab One® Account of Account Number TAX YEAR 2012 DANA JONES 1111-9999 FORM 1099 COMPOSITE JOHN JONES Recipient’s Name and Address Payer’s Name and Address Date Prepared: January 11, 2013 DANA JONES CHARLES SCHWAB & CO., INC. JOHN JONES 211 MAIN STREET C/O sampLE GLOBAL ENTERPRisE SAN FRANCISCO, CA 94105 3RD FLOOR, SUITE 1800 Telephone No: (800) 435-4000 1234 maiN STREET Federal ID Number: 94-1737782 ANYTOWN, US 12345 Taxpayer ID Number: ***-**-0000 Account Number: 1111-9999 Dividends and Distributions—2012 Form 1099-DIV Department of the Treasury–Internal Revenue Service Copy B for Recipient (OMB No. 1545-0110) Box Description Amount Total 1a Total Ordinary Dividends $ 5,805.00 (Includes amount shown in box 1b) 1b Qualified Dividends $ 2,380.00 2a Total Capital Gain Distributions $ 1,575.00 (Includes amounts shown in boxes 2b, 2c and 2d) 2b Unrecap. Sec. 1250 Gain $ 400.00 2c Section 1202 Gain $ 325.00 2d Collectibles (28%) Gain $ 400.00 3 Nondividend Distributions SAMPLE $ 933.00 4 Federal Income Tax Withheld $ 450 .00 5 Investment Expenses $ 240.00 6 Foreign Tax Paid $ 300.00 7 Foreign Country or U.S. Possession Canada 8 Cash Liquidation Distributions $ 950.00 9 Noncash Liquidation Distributions $ 2,700.00 10 Exempt-interest Dividends $ 2,700.00 11 Specified Private Activity Bond Interest Dividends $ 2,700.00 12 State VARIOUS 13 State Identification No. VARIOUS 14 State Tax Withheld $ 2,700.00 This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported. ©2012 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. 101 (0712-4872) Page 3 of 48 Schwab One® Account of Account Number TAX YEAR 2012 DANA JONES 1111-9999 FORM 1099 COMPOSITE JOHN JONES INstrUctioNS for RecipieNts of Form 1099 We are required by the Internal Revenue Service (“IRS”) to furnish the appropriate Forms 1099-DIV, 1099-INT, 1099-MISC, 1099-OID and 1099-B to you. The amounts listed on this composite form represent dividends, interest, and/or other reportable payments made or credited to you through your brokerage account during 2012. This information will be reported to the IRS. 1099-DIV: Dividends and Distributions Recipient’s identification number. Box 2c. For your protection, this form may show only the last four digits of your social security Shows the portion of the amount in box 2a that is section 1202 gain from certain small number (SSN), individual taxpayer identification number (ITIN), or adoption taxpayer business stock that may be subject to a 50% exclusion and certain empowerment zone identification number (ATIN). However, the issuer has reported your complete identification business stock that may be subject to a 60% exclusion. See the Schedule D (Form 1040) number to the IRS and, where applicable, to state and/or local governments. instructions. Account number. Box 2d. May show an account or other unique number the payer assigned to distinguish your Shows 28% rate gain from sales or exchanges of collectibles. If required, use this account. amount when completing the 28% Rate Gain Worksheet–Line 18 in the instructions for Box 1a. Schedule D (Form 1040). Shows total ordinary dividends that are taxable. Include this amount on line 9a of Form Box 3. 1040 or 1040A. Also, report it on Schedule B (1040A or 1040), if required. Shows the part of the distribution that is nontaxable because it is a return of your cost (or The amount shown may be dividends a corporation paid directly to you as a participant other basis). You must reduce your cost (or other basis) by this amount for figuring gain (or beneficiary of a participant) in an employee stock ownership plan E( SOP). Report or loss when you sell your stock. But if you get back all your cost (or other basis), report it as a dividend on your Form 1040/1040A but treat it as a plan distribution, not as future distributions as capital gains. See Pub. 550, Investment Income and Expenses. investment income, for any other purpose. Box 4. Box 1b. Shows backup withholding. A payer must backup withhold on certain payments if you Shows the portion of the amount in box 1a that may be eligible for the 15% or zero did not give your taxpayer