Tax Implications of SPAXX/FDIC Core Positions
Here’s a summary of the main issue and the solutions discussed in the conversation:
- Main Problem: The user, Dan, is inquiring about the tax implications of SPAXX/FDIC Core Positions and whether he needs to pay taxes if he does not make enough money.
- Solution 1: Fidelity representatives explained that distributions from the money market core position are treated as dividends and reported on a 1099-DIV, thus subject to tax based on individual circumstances.
- Solution 2: Dan was advised to consult a tax professional to address his specific tax-related questions and clarify his tax obligations.
- Additional Note: Another user mentioned that 1099 forms are marked as de minimus when applicable, which may affect reporting.
Here’s the full thread
Is SPAXX/FDIC Core Positions taxed? Which one is better?
Yes. Depends on your situation.
Hi, @dan.
our money market core position is technically a mutual fund. Because of this, if you have a non-retirement account, distributions from your core position behave like interest in that they pay monthly but are categorized as dividends and are reported on the 1099-DIV. To learn more about how mutual funds are taxed, check out the links below.
Mutual Funds and Taxes: https://www.fidelity.com/tax-information/tax-topics/mutual-funds
How Mutual Funds are Taxed: https://www.fidelity.com/tax-information/fidelity-mutual-fund-tax-information
If there is anything we can clarify or if additional questions pop up, please don’t hesitate to ask! We’re always happy to help. 🟢
If I don’t make enough money to be taxed, do I still have to pay taxes on it?
Hey @dan, we recommend speaking to a tax professional to review and answer your tax-related questions. 🟢
@dan not sure if you really just mean if the 1099 itself is de minimus but they do mark the 1099 as de minimus as appropriate when it is sent to you.