TAX GUIDE 2012 Tax Information For your Investment Account
Please Read Important Tax Information Enclosed
Table of Contents: Important Reminders for 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4 Form 1099-DIV/1099-INT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-7 Form 1099-OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Form 1099-B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9 Form 1099-MISC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Computation of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Form 1099-R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Information Regarding the Annual Tax Information Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-17 State Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19 Tax-Exempt Income Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Mutual Fund Capital Gain Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Foreign Tax Credit Explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Foreign Tax Credit Worksheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Widely-Held Fixed-Investment Trusts (WHFIT) Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Dear Investor: In this guide, you will find important year-end tax reporting information for your investment account custodied at the SEI Private Trust Company. We hope this guide is helpful when you or your tax advisor are completing and filing your 2012 income tax return. If you have specific questions about the reporting of your dividends and distributions, or which tax forms to use, please consult your personal tax advisor. If you have a specific question regarding your investment account, please contact your investment advisor. If you have a question for the Internal Revenue Service, you can contact the Service directly at 1-800-TAX-1040, or visit its website at irs.gov. Sincerely, SEI Private Trust Company
A Special Note For Investors This information is provided for your general guidance. This information is not intended to be a substitute for, nor should it be construed as, tax, legal, or other professional advice. Before undertaking any tax filing, it is recommended that you consult with a tax professional. This information is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction or matter addressed herein.
SEI 2012 TAX GUIDE
Important Reminders for 2012 February Mailing of Certain Tax Forms SEI Private Trust Company will be producing and mailing Forms 1009-B, 1009-DIV, 1099-INT, 1099-OID, and 1099-MISC on February 28, 2013. Form 1009-R will be produced and mailed by January 31, 2013.
1 Why is SEI Private Trust Company delaying the mailing of certain 1099 series tax forms until February 28, 2013? lthough in the past, forms may have been sent to you by February 15, it has often been necessary to send out revised A tax forms and tax-related information after February 15. You could have already filed your respective Federal and state tax returns based on the original tax forms received from a financial institution and subsequently had to file an amended return based on the “revised” tax forms.
2 How does waiting the additional 30 days help you? y waiting to send certain IRS 1099 series tax forms in late February, there is a greater chance that revised tax forms B and corresponding information will not need to be sent to you. In limited situations, revised information may still be sent to you beyond late February, depending upon decisions made by mutual fund companies, real estate investment trusts (“REITs”) and corporate entities in which SEI Private Trust Company holds shares on your behalf.
3 What causes a “revised” tax form to be issued after February 15? istributions made by mutual funds, REITs and some corporations are made throughout the year based on financial D assumptions. After the end of the calendar year, it is often necessary for the firms sponsoring these investments to change the tax characterization of the distributions based on final results.
Required Minimum Distributions for 2013 1 IRA holders age 70 ½ in 2013 are subject to Required Minimum Distributions (RMD). ›› IRA holders who attain age 70 ½ in 2013 have until April 1, 2014 to take their 2013 RMD. ›› IRA holders who attained the age of 70 ½ prior to 2013 must take their 2013 RMD by December 31, 2013.
2 Holders of Inherited IRAs may also be subject to Required Minimum Distributions in 2012.
Truncated Social Security Numbers The IRS has extended the pilot program allowing filers of information returns to truncate an individual payee’s identifying number on paper statements through the calendar years 2011 and 2012. The provision applies only to information returns in the 1098, 1099, and 5498 series. Under this optional program, payers may replace the first five digits of the payee’s SSN, ITIN, or ATIN with asterisks or the letter X. For example a Social Security Number will now appear as XXX-XX-1234. The IRS has not authorized the use of the truncated Taxpayer Identification Numbers for Payee Identification Numbers on EINs. This will enable better protection of personally identifying information for the recipients. SEI Private Trust Company will again be participating in this pilot program and will truncate your Social Security Number.
Widely-Held Fixed-Investment Trusts (WHFIT) What assets classes are considered WHFIT? Common WHFIT classes include:
1 Mortgage-Backed Security Pools or MBS assets 2 Unit Investment Trust or UIT assets and Commodity Trust 3 Real Estate Mortgage Investment Conduit (REMIC) 4 Royalty Trust and Holding Company Depository Receipts (HOLDERS Trust) Additional written information will be provided to holders of these assets to complete their individual tax returns. This information will be included with the final 2012 1099 mailed from SEI Private Trust Company. Additional information which may be included in the written statement for 2012 may include all items of gross income, items of expense, information on asset sales and dispositions, redemptions andsales of WHFIT units of the trust, and bond premium and market discount within the trust. Note: An example WHFIT statement is available at the end of this document.
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SEI 2012 TAX GUIDE Income reported on the 1099 from these trusts will not match the income from distributions on the monthly statements. Items of gross income, including certain trust expenses, will now be included with income. Tax liability may be based on an amount greater than the cash received. For example, an asset may have had income payments that were associated with the trust that were paid 100% to administrative expenses. This would not have been shown on the monthly statement since there was no actual payment to the shareholder. These trust expenses will be grossed up and included in the income and the expense sections on the written statement. The expenses are subject to the 2% AGI limitation. Expenses will likely not exceed the 2% AGI limitation, losing the advantageous tax treatment.
Cost Basis Reporting on Form 1099-B: Prior to 2011, cost basis information provided on form 1099-B was for informational purposes only and not sent to the IRS. Beginning with the 2011 tax year, the IRS is requiring cost basis to be reported for covered securities. For 2011, covered securities entailed stocks of corporations that were purchased after January 1, 2011. Starting with the 2012 tax reporting year, mutual funds and Dividend Reinvestment Plans purchased after January 1, 2012 will also be covered. Any other securities specified by the IRS will be covered January 1, 2014. State
Withholding for IRA Distributions: If you elected to have SEI Private Trust Company remit state tax withholding on distributions from your IRA account, you may receive two IRS 1099-R forms (Distributions from Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc.) if the following events occur in the order listed: ›› You take a distribution from your account and have no state withholding; ›› You take a subsequent distribution with state tax withholding Both of these forms need to be included when you or your tax professional prepare your IRS Form 1040 (U.S. Individual Income Tax Return). These forms will be formatted slightly differently; both will reflect SEI Private Trust Company as the payer. Both 1099-R forms will be printed and mailed to you separately by the January 31, 2013 IRS mailing deadline.
Special Note for Investors in Hedge Funds A and Other Partnership Investments: IRS Form 1065 (Partners Share of Income/Loss), Schedule K-1, will be sent directly from the partnership, and will not be included in the SEI Private Trust Company tax package. IRS Form 1065, Schedule K-1 is used by partnerships to report to partners their portions of the partnership’s income, deductions, credits, etc. This information is often not available from the partnership until after the tax filing deadline of April 15th. You should consult your tax advisor regarding filing an extension for the 2012 tax year if this applies to you. 4
For IRA Accounts Holding Partnership Assets: If an IRA account has in excess of 1,000 dollars of UBTI income, SEI will be required to file a form 990-T on your behalf. As part of the filing process, SEI is required to request an EIN for the IRA. As such, clients will be required to submit a form SS4 along with a statement authorizing SEI to request an EIN on your behalf. Once an EIN is received, the 990-T will be processed, and any taxes due will be paid out of your IRA account assets. * If you receive a K1 form for a holding within your IRA account from the partnership, please forward this to: SEI Private Trust Company Attn: Leveraged Tax Reporting 1 Freedom Valley Dr. Oaks, PA 19456
A Special Note for Investors in the SEI REIT and Other REIT Fund Investments: REIT investments typically do not finalize their tax information until after February 15. The information provided on Form 1099DIV relating to the SEI REIT and other REIT funds is only an estimate at this time. Finalized Forms 1099-DIV will be mailed by February 28, 2013.
Special Note for Investors in the Managed A Accounts and Integrated Managed Accounts Programs: Investors in the Managed Accounts Program and the Integrated Managed Accounts Program (IMAP™) will receive one 2012 Combined Year-End Tax Form package which links all the underlying accounts.
A Special Note for Investors in Non-SEI Securities: If a non-SEI security provides revised tax information to SEI Private Trust Company, you may receive a revised 2012 Combined Year-End Tax Form package which will include a revised 1099-DIV form.
SEI 2012 TAX GUIDE The following pages describe the forms you may receive from SEI in early 2012, as well as an explanation of the information shown and how to use this data when filling out your 1040 or 1040A tax form(s). Please note that some investors may be eligible to file a Form 1040EZ. Please refer to the instructions for this form from the IRS.
Form 1099-DIV/1099-INT Form 1099-DIV This form reports total income derived from dividends and capital gain distributions from stocks, bonds, futures contracts, and mutual funds during the preceeding year. Use it to report dividend income in the applicable parts of Form 1040 or Form 1040A. (Distributions are considered taxable whether received in cash or reinvested.) It will be mailed on February 28, 2013.
A B C D E F G H
I
A Total Ordinary Dividends eports net ordinary dividends and short-term capital gain R distributions that are fully taxable. If Schedule B is not required, report the total of your ordinary income dividends from all sources on Form 1040 or 1040A, Line 9a.
B Qualified Dividends hows the portion of the amount on Line 1a that may be S eligible for the 15% or 0% capital gains rates. See the Form 1040 instructions to determine this amount. Report the eligible amount on Line 9b, Form 1040 or 1040A.
C Total Capital Gain Distributions eports net long-term capital gain distributions. If there are R capital gains from sales reported on Form 1099-DIV, report the amount shown on Schedule D, Line 13. If there are no other capital gains/losses, report the amount shown, along with any other capital gain distributions from Form 1099-DIV, directly on Form 1040, Line 13 or on Form 1040A, Line 10. If you are filing a 1040 check the box on Line 10. Also be sure to use the “Qualified Dividends and Capital Gain Tax Worksheet” on page 37 of the Form 1040 general instructions and on page 33 of the Form 1040A general instructions.
ote: Do not confuse mutual fund capital gain distributions N with capital gains created from the sale of an investment in a mutual fund. For information regarding the reporting of capital gains and losses from the sale of an investment, please use Form 1099-B (page 8), which discloses the proceeds from the sale of the security, and your SEI Private Trust Company Annual Tax Information Statement (beginning on page 13), which will provide the balance of the required data for preparing your Form 1040, Schedule D.
D Unrecaptured Section 1250 Gain hows the portion, if any, of capital gain distributions S on Line 2a attributable to IRS Code Section 1250 real estate investments. Section 1250 requires that gains on disposition of real property be treated as ordinary income to the extent of the depreciation claimed in excess of straight line. See the worksheet for Schedule D, Line 19, on page D-12. Consistent with the Form 1040A instructions (page 20), you will not be eligible to file a Form 1040A if an amount is reported on this line. In that case, you must file Form 1040 and applicable schedules.
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SEI 2012 TAX GUIDE
E Nondividend Distributions (Box 3) (Return of Capital Distributions) “Nondividend Distributions,” on the 2012 Form 1099DIV, shows the part of the distribution that is non-taxable because it is a return of your cost. A return of capital distribution reduces your basis (or cost) in the investment. If the return of capital distribution is in excess of your basis in the investment, you must recognize capital gain on your Form 1040, Schedule D to the extent of the excess. See IRS Publication 550 Investment Income and Expenses for more information.
F Federal Income Tax Withheld hows backup withholding from one or more 2012 S distributions. See Form W-9, Request for Taxpayer Identification Number and Certification, for information on backup withholding. Include this amount on Form 1040, Line 62 or Form 1040A, Line 36.
G Foreign Tax Paid Refer to foreign tax credit explanation on page 21. Please see page 38 of Form 1040 instructions for more information.
H Exempt Interest Dividends The value of all exempt interest dividends received from mutual funds and other regulated investment companies in 2012. This is reported in Box 8b of forms 1040 and 1040A.
I Specified Private Activity Bond Interest Dividends Shows exempt interest dividends subject to the alternative minimum tax. This amount is included in Box 10. This should be included on Form 6251 line 12.
Form 1099-INT This form reports interest paid (received or accrued) during the calendar year. Use it to report interest in the applicable parts of Form 1040 or Form 1040A. It will be mailed on February 28, 2013.
J L N Q
K M O P
J Interest Income Not Included in Box 3 his does not include interest shown in Box 3. Report the T total on Form 1040 or Form 1040A, Line 8a.
K Early Withdrawal Penalty educt this amount on Form 1040, Line 30 “Penalty on D early withdrawal of savings.” If utilizing this deduction you cannot file a Form 1040A.
L Interest on U.S. Savings Bonds, Treasury Bills, Treasury Bonds, and Treasury Notes To determine taxability, see IRS Publication 550, Investment Income and Expenses. This interest may be exempt from state and local income taxes. This interest is not included in Box 1.
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M Federal Income Tax Withheld hows backup withholding from one or more 2012 S distributions. See Form W-9, Request for Taxpayer Identification Number and Certification, for information on backup withholding. Include this amount on Form 1040, Line 62 or Form 1040A, Line 36.
N Investment Expenses mounts shown reflect shares of investment expenses A of a single-class REMIC. If filing Form 1040, deduct these expenses on the “other expenses” line of Schedule A, Line 23, subject to the 2% AGI limit. This amount is included in Box 1.
SEI 2012 TAX GUIDE
O Foreign Tax Paid
investment company. Starting in 2012, exempt interest dividends from a mutual fund will be included on the 1099-DIV.
efer to foreign tax credit explanation on page 21. R Please see page 38 of Form 1040 instructions for more information.
Q Specified Private Activity Bond Interest
P Tax-Exempt Interest
hows tax-exempt interest subject to the Alternative S Minimum Tax. This amount is included in Box 8. Report this amount on Form 6251, Line 12 (if applicable).
Shows tax exempt interest paid or accrued to you in 2012. In prior years, this included exempt-interest dividends from a mutual fund or other regulated
Form 1099-OID A long-term debt instrument generally has Original Issue Discount (OID) when it is issued for a price less than its stated redemption price at maturity (principal amount). The OID is the difference between the stated redemption price at maturity and the issue price. OID is considered to be a form of interest. All debt instruments that pay no interest prior to maturity (zero-coupon bonds) are presumed to be issued at a discount. The majority of OID bonds are zero-coupon bonds. However, it is possible for a bond making periodic coupon payments to also have OID. OID is reported as it accrues, whether or not any payments are received from the bond issuer. In cases where cost basis and acquisition date information have not been provided to SEI Private Trust Company, OID will be reported under the rules set forth in IRS Publication 1212. Investors with missing information should consult their tax advisors to determine if their reported OID may require adjustment. OID = the stated redemption price at maturity less the issue price
A
D
B C
A CUSIP Identification number of the security.
B Description his description may include the stock exchange issuer, T coupon rate, and year of maturity of the obligation.
C Original Issue Discount eport this amount as interest income. The OID on R taxable fixed-income securities has been calculated as required by IRS rules, as set forth in IRS Publication 1212. In the event that taxable OID instruments were acquired at a premium or discount from the original issue price, or the obligation is a stripped bond or coupon, compute the proper amount of reportable OID including any required adjustments for amortized premium or discount. See IRS Publication 1212 to determine the proper amount of the OID adjustment.
E
D Original Issue Discount on Treasury Obligations he OID on Treasury obligations is exempt from T state and local taxes. Report this amount as interest income on your Federal income tax return, and see IRS Publication 1212 to figure any appropriate adjustments to this amount.
E Federal Income Tax Withheld hows backup withholding from one or more 2012 S distributions. See Form W-9, Request for Taxpayer Identification Number and Certification, for information on backup withholding. Include this amount on Form 1040, Line 62 or Form 1040A, Line 36.
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SEI 2012 TAX GUIDE
Form 1099-B
A
F
H
8
B
E
G
D
C
SEI 2012 TAX GUIDE
This form reports the total net proceeds from the sale of stocks, bonds, futures contracts, or mutual funds during the prior calendar year. These transactions should be reported on Form 1040, Schedule D. Form 1099-B also reports the Date of Sale, Proceeds, Federal Tax Withheld (if any), and number of shares redeemed. It does not include transactions affecting retirement accounts or money market funds. When shares from an investment account are redeemed, it is generally a taxable transaction, which must be reported to the IRS. The 1099-B will be mailed on February 28, 2013, and should be used in conjunction with the SEI Private Trust Company Tax Information Statement (page 12) when completing Form 1040, Schedule D. The 1099-B form will have separate sections for covered and non-covered securities. The two sections are needed to comply with the guidelines established by the Emergency Economic Stabilization Act of 2008. For covered securities, both the gain/loss information and the cost basis information will be included on the 1099-B and transmitted to the IRS. For non-covered securities, only the gain/loss information will be transmitted to the IRS.
A Description (Box 9) hows a brief description of the item or service for which S the proceeds income is being reported.
B Stocks, Bonds, Etc (Box 2) Use to report proceeds from a sale.
C Federal income Tax Withheld (Box 4) hows backup withholding from one or more 2012 S distributions. See Form W-9, Request for Taxpayer Identification Number and Certification, for information on backup withholding. Include this amount on Form 1040, Line 62 or Form 1040A, Line 36.
D Net Capital Gain or Loss If shares are sold or redeemed from an investment account (excluding money market funds), a capital gain or loss is required to be reported to the IRS. To calculate this gain or loss, the cost basis of the shares sold and the holding period for those shares must be determined.
E C ost or Other Basis The cost basis of an investment is typically the purchase price, including any sales charges that were paid. If the dividends and capital gain distributions are reinvested, all statements that identify the date, share price and number of full or fractional shares bought with reinvested dividends and capital gain distributions should be kept. For tax purposes, these reinvestments are considered additional purchases made at the net asset value share price on the day the transaction occurred. When a return of capital is reported to you on Form 1099-DIV, Box 3, you must reduce your cost basis in that security by the amount shown.
F Details each sale of security/fund shares with pertinent information and resulting short-term/long-term gain or loss.
G Details of short-term and long-term losses that were disallowed due to wash sales.
H Detail of sales with unknown cost basis. In an instance of sale with multiple tax lots, it is possible to see some cost basis listed. This means that one of the multiple tax lots has a cost that is unknown. The cost that is reflected is for the remaining good tax lots in the sale of assets.
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SEI 2012 TAX GUIDE
Form 1099-MISC This form reports the total miscellaneous income derived from royalties, broker payments, rents, services, fishing boat proceeds, gross proceeds to an attorney, and other non-employee compensation during the prior calendar year. Use it to report miscellaneous income in the applicable parts of Form 1040. Form 1099-MISC will be mailed on February 28, 2013.
B A
A Other Income he amount shown represents taxable income paid to you during the current year. Include this income on Form 1040, Line 21 T “Other income.” Please note that this income is not self-employment income.
B Royalties he amount shown represents royalty interest and income from properties producing gas, oils and minerals. Include this T income on Form 1040, Schedule E, Line 3B and Form 1040, Line 17.
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SEI 2012 TAX GUIDE
Computation of Expenses All data in this chart is derived from the Dividends and Interest Detail heading of the tax return. The following paragraphs explain how to find the income figures on the tax return and how to calculate the other figures in the chart.
1 Tax Exempt Income This is the amount of interest that the investor earned on municipal bonds. Municipal bonds are exempt from taxation at the Federal level and in the state of issuance, municipal bonds are exempt from taxation at the state tax level. The tax exempt income can be calculated by adding the following items in the Interest section of the tax return: Municipal Interest non-taxable in XX . (situs state NJ, NY, PA, etc.) and the Municipal Interest taxable in XX (situs state NJ, NY, PA, etc.)
2 Gross Taxable Income This is the total of dividends and/or interest that the client received from investments other than municipal bonds. The gross taxable income can be calculated by adding the following: qualified dividends, non-qualified dividends, interest, and the net gain or loss on Schedule 1099-B reportable transactions.
3 Total Income = Line 1 + Line 2 4 Allocable Expenses This amount can be found on the tax return under the Other Tax Information heading. The allocable expenses are called “Deductions” in this section.
5 Expenses Allocated to TEI = Line 1 / Line 3 * Line 4 6 Expenses Allocated to Taxable Income = Line 4 Less Line 5
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SEI 2012 TAX GUIDE
Form 1099-R This form reports the total distributions from pensions, annuities, retirement or profit sharing plans, IRAs, insurance contracts, etc. during the prior calendar year. Use it to report distributions from these investments in the applicable parts of Form 1040 or Form 1040A. Form 1099-R will be mailed by January 31, 2013.
A B C D E
A Gross Distribution eports the amount received in 2012 including state R and Federal withholding. If the account is an IRA, see the instructions for Form 1040, Line 15a, on pages 22-23 or Form 1040A, Line 11a on page 21. For other types of retirement plans use the instructions for Form 1040, Line 16a, on pages 23-25 or Form 1040A, Line 12a, on pages 21-23.
B Taxable Amount eports the portion of total distributions from Line 1 that R are taxable. If the account is an IRA, see the instructions for Form 1040, Line 15b, on pages 22-23 or Form 1040A, Line 11b on pages 21. For other types of retirement plans use the instructions for Form 1040, Line 16b, on pages 23-25 or Form 1040A, Line 12b, on pages 21-23.
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C Taxable Amount Not Determined If this box is checked, it indicates that the SEI Private Trust Company did not have enough information to calculate the taxable amount. In this case, follow the instructions for Form 1040, Line 15b or 16b or Form 1040A, Line 11b or 12b, as applicable, to determine the taxable amount.
D Federal Income Tax Withheld hows Federal tax withholding from one or more 2012 S distributions. Include this amount on Form 1040, Line 62 or Form 1040A, Line 36.
E Distribution Codes Indicates the IRS code which identifies the type of distribution taken from the account during the applicable tax year. Refer to the opposite side of Form 1099-R for an explanation of each code. If distributions are received requiring multiple codes, a separate Form 1099-R will generally be received for each code.
SEI 2012 TAX GUIDE
Information Regarding the Annual Tax Information Statement (see next pages) For assistance in the preparation of income tax returns, the SEI Private Trust Company provides a detailed, end-of-year Tax Information Statement for each taxable account. This report summarizes all transactions with tax implications. Please remember this Tax Information Statement is a value-added service and not furnished to the IRS. When combined with Forms 1099-DIV, 1099-INT, 1099-OID and 1099-B, the Tax Information Statement routinely provides all the information required to complete applicable sections of Form 1040, Schedule A, Schedule B, and Schedule D or Form 1040A or Form 1040EZ including all income posted to an account, fees and taxes withheld, sale transactions proceeds and cost basis, and gain or loss information based upon the accounting principle of First In-First Out (FIFO), which assumes shares are sold in the same order that they are bought (unless a different method is utilized for your account). For all TaxManaged accounts, however, this information is based on the highest-cost securities/shares being sold first (HIFO).
A Explanation of the Summary Statement. B U.S. dividend income and qualified dividends. C Details and totals for U.S. government interest reported as dividends. D Details and totals for foreign dividends. E Domestic interest income reported on 1099-INT. F Interest accrued on a market discount bond that may be included as current-year interest income. G Foreign interest that is included in Box 1 on 1099-INT. H Totals for tax-exempt income possibly taxable in the state depending on residency. Please consult a tax advisor for specific details. If you held any tax-exempt OID bonds during 2012, this figure may include both the acquisition premium and the tax-exempt interest associated with those bonds.
I Totals for both short-term and long-term gains and losses resulting from sales (refer to Form 1099-B section Letter F). J Totals for short-term and longer-term capital gain dividends (distributions). (The sample statement does not include an example of short-term capital gain dividends.)
K Portion of capital gain distributions attributable to IRS code 1250 Real Estate Investments. L Total basis of covered and non-covered securities. M Total amount of losses that were disallowed due to wash sales. N Refer to foreign tax credit explanation on page 21 with the “Foreign Tax Credit Explanation” section.
For additional questions, please consult your tax advisor.
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SEI 2012 TAX GUIDE
Tax Summary A
B C D E F G H
I
J K
L
N
14
M
SEI 2012 TAX GUIDE
Summary of Foreign Investments
N
Dividends and Interest Detail B
D
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SEI 2012 TAX GUIDE
Non-Qualified Dividends B
C
D
J
K
16
SEI 2012 TAX GUIDE
Interest E
G
F
H
N
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SEI 2012 TAX GUIDE
State Tax Information Some states allow a taxpayer to exclude from state tax calculations part of the income earned by certain securities purchased by a mutual fund. If the taxpayer excludes this income, he/she may be able to reduce state income taxes. This information may vary for each fund owned and by the state in which the taxpayer resides. The income dividends received from an SEI municipal bond fund are normally exempt from Federal income taxation. These income dividends, however, are subject to certain special Federal and state income tax considerations.
United States Government Interest Please check the state and local tax office or with a tax advisor to determine whether a specific state will allow exclusion from some or all of the income earned from mutual funds that invest in direct U.S. government obligations. Below is the percentage of income from U.S. government obligations generally exempt from state income tax. Due to certain statutory limitations, shareholders who are residents of California, Connecticut, or New York, and are investors in the funds notated with a (1) found on pages 18-19, are not permitted to exclude the portion of ordinary income that represents direct U.S. government obligations from their state income taxes. Please consult a tax advisor. (Applies to all Classes) *Applies to Fund #155 as well. Fund #
Fund Name
Fund #
SEI Institutional Managed Trust 060
Large Cap Value Fund (1)
064 674
Fund Name
SEI Institutional Investments Trust 0.00%
287
Small Cap Fund (1)
Core Fixed Income Fund (1)
8.43%
286
Large Cap Fund (1)
0.01%
Small Cap Growth Fund (1)
0.00%
2867
Large Cap Disciplined Equity Fund (1)
0.03%
068
Mid-Cap Fund (1)
0.00%
2866
Large Cap Index Fund (1)
0.01%
058
Small Cap Value Fund (1)
0.00%
2868
Small/Mid Cap Equity Fund (1)
0.01%
057
Large Cap Growth Fund (1)
0.01%
281
International Equity Fund (1)
0.01%
059
High Yield Bond Fund (1)
0.00%
283
World Equity Ex-U.S. Fund (1)
0.01%
069
Tax-Managed Large Cap Fund (1)
0.00%
285
Core Fixed Income Fund (1)
8.80%
071
Tax-Managed Small/Mid Cap Fund (1)
0.00%
289
Screened World Equity Ex-U.S. Fund (1)
0.01%
072
U.S. Managed Volatility Fund (1)
0.00%
2870
Long Duration Fund (1)
10.07%
074
Real Estate Fund (1)
0.00%
284
High Yield Bond Fund (1)
0.00%
079
Global Managed Volatility Fund (1)
0.01%
288
Emerging Markets Debt Fund (1)
0.00%
080
Enhanced Income Fund (1)
0.60%
2871
Large Cap Diversified Alpha Fund
055
S&P 500 Index Fund (1)*
0.00%
2873
Real Return Fund
082
Tax-Managed Managed Volatility Fund (1)
0.00%
312
U.S. Managed Volatility (1)
083
Real Return Fund
27.34%
310
Dynamic Asset Allocation (1)
0.15%
091
Large Cap Fund (1)
0.00%
314
Ultra Short Duration
1.59%
092
Small Cap Fund (1)
0.03%
316
Multi-Asset Real Return Fund
065
U.S. Fixed Income Fund (1)
6.45%
291
Small Cap II Fund
0.02%
084
Multi Strategy Alternative Fund
0.00%
313
Long Duration Corporate Bond Fund
2.08%
085
Multi-Asset Accumulation Fund
0.61%
086
Multi-Asset Income Fund
0.00%
Fund #
Fund Name
087
Multi-Asset Inflation Managed Fund
089
Multi-Asset Capital Stability Fund
19.69% 4.76%
0.01%
0.03% 44.81% 0.01%
35.90%
SEI International Trust 095
International Equity Fund (1)
0.00%
097
Emerging Markets Equity Fund (1)
0.00%
096
International Fixed Income Fund (1)
0.06%
098
Emerging Markets Debt Fund (1)
0.00%
(continued) 18
SEI 2012 TAX GUIDE (Applies to all Classes) Fund #
Fund Name
SEI Tax-Exempt Trust 020
Tax Free Fund (1)
0.00%
021
Institutional Tax Free Fund
0.00%
023
Intermediate-Term Municipal Fund (1)
0.00%
026
Short Duration Municipal Fund (1)
0.00%
024
Pennsylvania Municipal Bond Fund (1)
0.00%
270
Massachusetts Municipal Bond Fund (1)
0.00%
018
New Jersey Municipal Bond Fund (1)
0.00%
029
New York Municipal Bond Fund (1)
0.00%
019
California Municipal Bond Fund (1)
0.00%
027
Tax-Advantaged Income Fund (1)
0.00%
Fund #
Fund Name
SEI Daily Income Trust 033
Government II Fund
82.26%
036
Government Fund (1)
36.41%
034
Prime Obligation Fund (1)
2.30%
032
Money Market Fund (1)
2.40%
045
Short-Duration Government Fund (1)
5.05%
046
Intermediate-Duration Government Fund (1)
4.07%
047
GNMA Fund (1)
0.00%
038
Treasury Fund (1)
35.58%
037
Treasury II Fund
83.81%
041
Ultra Short Duration Bond Fund (1)
Fund #
Fund Name
1.46%
SEI Asset Allocation Trust 514
Defensive Strategy Fund (1)
8.36%
516
Conservative Strategy Fund (1)
5.24%
518
Moderate Strategy Fund (1)
3.98%
520
Aggressive Strategy Fund (1)
0.12%
524
Core Market Strategy Fund (1)
2.69%
511
Market Growth Strategy Fund (1)
515
Defensive Strategy Allocation Fund (1)
0.00%
517
Conservative Strategy Allocation Fund (1)
0.00%
—
Moderate Strategy Allocation Fund (1)
0.00%
523
Tax-Managed Aggressive Strategy Fund (1)
0.00%
—
Core Market Strategy Allocation Fund (1)
0.00%
513
Market Growth Strategy Allocation Fund (1)
0.00%
Fund #
Fund Name
1.91%
SEI Liquid Asset Trust 012
Prime Obligation Fund (1)
Fund #
Fund Name
1.81%
Advisor Managed Trust —
Tactical Offensive Equity Fund
0.00%
—
Tactical Offensive Fixed Income Fund
3.47%
—
Tactical Defensive Fund
0.00%
19
SEI 2012 TAX GUIDE
Tax-Exempt Income Information Federal Tax Treatment Federal tax law allows income from mutual funds investing in municipal obligations to be considered tax-exempt income. In prior years, all tax-exempt income was required to be reported on the 1099-INT in boxes 8 and 9. Starting with the 2012 tax reporting year, tax-exempt income from mutual funds will be reported on the 1099-DIV in boxes 10 and 11. Tax-exempt income from municipal bonds will still be reported on the 1099-INT in boxes 8 and 9. You must report this amount on Form 1040 or Form 1040A, Line 8b. The amount reported in Box 9 of Form 1099-INT must be used in preparing Form 6251 to determine if you are subject to Alternative Minimum Tax. Any income distribution that is taxable income is included on your Form 1099-DIV Box 1a. This amount must be reported on Form 1040 or Form 1040A, Line 9.
State and Local Tax Treatment Some of the Federal tax-exempt dividends may also be exempt from state and local taxes, depending upon where the investor files a return. Since state and local tax regulations may vary from state to state, and not all states permit such an exclusion, please consult a tax advisor. If permitted this amount can be excluded and the remaining balance should be reported on the state return. This calculation has been completed as part of the SEI Private Trust Company Tax Information Statement (page 12, section I).
Alternative Minimum Tax Municipal bond income subject to the Alternative Minimum Tax has been calculated and is provided to you in the SEI Private Trust Company Tax Information Statement (page 12, section I).
Mutual Fund Capital Gain Reporting Individuals can report mutual fund capital gain distributions directly on Form 1040, Line 13 or Form 1040A, Line 10, provided a set of conditions are satisfied, otherwise, activity must be reported on Schedule D. Please refer to Form 1040 or Form 1040A for instructions, or consult a tax advisor, to determine if this is applicable.
20
SEI 2012 TAX GUIDE
Foreign Tax Credit Explanation Foreign Tax Credit & Foreign Source Income The SEI International Trust (“SIT”) Emerging Markets Equity Fund, the SEI Institutional Investments Trust (“SIIT”) International Equity Fund, the SIIT Screened World Equity Ex-U.S. Fund, the SIIT World Equity Ex-U.S. Fund, and SIT International Equity Fund qualified for and elected to pass through foreign tax credits to their shareholders. Accordingly, you are entitled to claim a foreign tax credit or take an itemized deduction on your Federal income tax return for your share of the taxes indicated on your 2012 Form 1099-DIV, Box 6. To be eligible to claim a foreign tax credit, you must have held your shares for more than 15 days within a 31 day period beginning 15 days before the distribution date. The maximum credit a taxpayer may use is generally limited to the percentage of U.S. tax that equals the taxpayer’s foreign-source taxable income as a percentage of worldwide taxable income. If your total creditable foreign taxes paid are not more than $300 ($600 if married filing jointly) and you meet all of the other requirements, you may be eligible to elect to claim a foreign tax credit, without regard to the foreign limitation and without filing Form 1116. If your total creditable foreign taxes paid are more than $300 ($600 if married filing jointly), you will be required to compute the foreign limitation and complete Form 1116. To calculate the foreign tax credit limitation, you will need to know your foreign-source income and foreign qualifying dividend income from all sources. Please use the worksheet on the next page to obtain your Fund’s pertinent information and aggregate it with similar information from other investments you own. Foreign income passed through from a mutual fund or other regulated investment company (RIC) is not required to be reported on a country by country basis. Total all of the taxes paid and income derived from the RIC on a single line entry and Enter “RIC” in the Foreign Country or US possession field. If you are required to report foreign tax information by country on Form 1116, please contact Investor Services at 1-800-DIAL-SEI or your advisor.
21
SEI 2012 TAX GUIDE
Foreign Tax Credit Worksheets SIT Emerging Markets Equity Fund (A) Foreign Source Income Input Total Ordinary Dividends from this Fund’s Form 1099-DIV, Box 1a
(i)
SIIT Screened World Equity EX-U.S. Fund (B) Foreign Qualifying Dividend Income
(i)
x Factor (Use the factor as disclosed on this line)
(i) x (ii)
(ii) x 1.00
(i) x (ii)
SIT International Equity Fund (A) Foreign Source Income Input Total Ordinary Dividends from this Fund’s Form 1099-DIV, Box 1a
(B) Foreign Qualifying Dividend Income
(i)
(i)
(ii) x 0.98
(ii) x 1.00
x Factor (Use the factor as disclosed on this line) Foreign Source Income and Foreign Qualifying Dividend Income to be used for Foreign Tax Credit Limitation
(i) x (ii)
(i) x (ii)
SIIT World Equity EX-U.S. Fund (A) Foreign Source Income Input Total Ordinary Dividends from this Fund’s Form 1099-DIV, Box 1a
(B) Foreign Qualifying Dividend Income
(i)
(i)
(ii) x 1.00
(ii) x 0.80
(i) x (ii)
(i) x (ii)
x Factor (Use the factor as disclosed on this line)
Foreign Source Income and Foreign Qualifying Dividend Income to be used for Foreign Tax Credit Limitation
22
Input Total Ordinary Dividends from this Fund’s Form 1099-DIV, Box 1a
(B) Foreign Qualifying Dividend Income
(i)
(i)
(ii) x 0.69
(ii) x 0.65
(i) x (ii)
(i) x (ii)
x Factor (Use the factor as disclosed on this line)
(ii) x 0.92 Foreign Source Income and Foreign Qualifying Dividend Income to be used for Foreign Tax Credit Limitation
(A) Foreign Source Income
Foreign Source Income and Foreign Qualifying Dividend Income to be used for Foreign Tax Credit Limitation
SIIT International Equity Fund (A) Foreign Source Income Input Total Ordinary Dividends from this Fund’s Form 1099-DIV, Box 1a
(B) Foreign Qualifying Dividend Income
(i)
(i)
(ii) x 0.98
(ii) x 0.76
(i) x (ii)
(i) x (ii)
x Factor (Use the factor as disclosed on this line)
Foreign Source Income and Foreign Qualifying Dividend Income to be used for Foreign Tax Credit Limitation
SEI 2012 TAX GUIDE
Widely-Held Fixed-Investment Trusts (WHFIT) Example
23
If you have a question for the Internal Revenue Service, you can contact the Service directly at 1-800-TAX-1040, or visit its website at irs.gov
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