2009 Tax Information
When mutual funds distribute income to shareholders, the distributions may fall into one of several categories and each is governed by a different set of tax rules.
When a mutual fund receives dividends from domestic and qualifying foreign corporations within its portfolio, it generally may pass them along to individuals as a qualified dividend distribution.
The federal tax rates that apply to long-term capital gains also apply to qualified dividends, which include dividends paid by domestic and qualifying foreign corporations. For a dividend paid by a mutual fund to qualify for the special dividend tax rate, individuals are required to hold their fund shares for more than 60 days in the 121-day period beginning 60 days before the ex-dividend date.
If investors do not hold their shares for the required period, the dividend will be taxed as ordinary income. Unless congress amends existing rules, qualified dividends are subject to the same tax rates as long-term capital gains through 2010. The special rates for qualified dividends are scheduled to "sunset," or expire, on December 31, 2010. For more information see our long-term capital gain page.
| Ordinary Income Tax Rate |
Rates from 2008-2010 |
| 10% | 0% |
| 15% | 0% |
| 25% | 15% |
| 28% | 15% |
| 33% | 15% |
| 35% | 15% |
1. Unless Congress acts to modify rates before December 31, 2010.
This information is for use with concurrent or prior delivery of a fund prospectus. Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. To learn more about this and other important information about each fund, download a free prospectus. The prospectus should be read carefully before investing.
Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Columbia Management Investment Advisers, LLC and its affiliates do not offer tax or legal advice. Consult with your tax advisor or attorney regarding your specific situation.
Not all products and all share classes are available through all firms.
RiverSource®, Seligman® and Threadneedle® mutual funds are distributed by Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), member FINRA and managed by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC). Threadneedle mutual funds are subadvised by Threadneedle International Limited, an affiliate of Columbia Management. Seligman is an offering brand of Columbia Management.