Financial Insights

2020 Tax Filing Information

The initial tax filing season for 2020 is approaching and we wanted to provide some reminders to help you prepare.

Your custodian (Fidelity, TD Ameritrade, Schwab, E*Trade) provides the basic tax reporting for your accounts.


For a taxable account, you will receive a consolidated 1099 form, which reports interest (1099-INT), dividends (1099-DIV), realized capital gains and losses (1099-B) and any miscellaneous income (1099-MISC) all in one report.

If applicable, Forms 1099 will also include other expenses paid out of your taxable accounts such as custodian fees, margin interest, and foreign taxes which may also be deductible.  Investment advisory fees paid to ACM will also be reported on your 1099 form.

You should provide the consolidated 1099 form for any taxable accounts (individual, joint, trust) to your tax preparer/CPA, if you are using one.  If you don’t want to wait for your 1099 to come in the mail, you can log in to your account through your custodian’s website and access your 1099 online and download it at your convenience.

Click the following to log in to Fidelity, TD Ameritrade, Schwab or E*Trade.

As of this commentary, your custodian may have only a “preliminary 1099” available online, which means that they have accumulated most, but perhaps not all the information needed at this time to complete your tax return.

Public companies sometimes re-characterize income after year-end, which may result in your custodian having to issue one or more revised 1099 forms before a final 1099 form is complete.  For this reason, if you plan on filing by this year’s April 15 deadline, your tax preparer may recommend that you wait until late March to ensure that you have the complete data.


Distributions from IRAs and other retirement accounts typically constitute ordinary income and are reported on Form 1099-R for tax purposes, which you should also provide to your tax preparer and which can be similarly accessed online, when available, by logging into your account.

During 2020, many IRA owners subject to “required minimum distributions” were able to return their RMDs as result of the CARES Act passed in March 2020, or because they took a distribution that they returned within the IRS’s 60-day rollover window.

These distributions will be reported on your 1099 as a “normal/over 59 ½” distribution (if you were older than 59 ½ in 2020) and you will report the distribution on your tax return.

Your custodian may have already issued a form 5498 which will report the amount you returned back to your IRA in 2020 as “rollover contribution”.  Any amount returned to your IRA during 2020 according to the CARES Act and IRS rules can be subtracted from the distribution to determine the “taxable amount” for 2020.  Please ask your tax preparer if you have any questions.

Form 5498 is an information statement that it not required to be filed with your tax return.  Form 5498 will also report 2020 IRA contributions and rollover amounts and, depending on the custodian, the year-end value of your IRA, the securities owned at year-end and details on your designated beneficiaries.  Because taxpayers have until April 15 to make contributions to IRAs for the prior tax year, form 5498 is sometimes not posted until May, which means you may have finished your taxes before you receive this form.


Investors in certain ACM investment strategies may have owned securities issued by publicly traded limited partnerships or limited liability companies. Each investor’s share of the partnership’s income, deductions and credits, are reported on Schedule K-1 (Form 1065), which is issued by each respective limited partnership/limited liability company and reported separately from Form 1099.

For the 2020 tax year, this will include not only ACM’s Income with Growth strategy, but also certain versions of our Balanced strategy.

If you owned preferred A or B units of Oaktree Capital, LLC in a taxable account invested in our Balanced strategy, you will be able to access your K-1 here when it is available and you should provide this to your tax preparer.  As of this commentary, Oaktree is indicating that the 2020 K-1 will be available as of March 31, 2021. We recommend that you provide the rest of your information (1099, 1099-R) to your tax preparer in advance and let them know that a K-1 is coming.

Please note that we are not expecting any material tax implications from Oaktree and the issue of the K-1 is primarily a tax reporting formality.

We hope that you find the above information useful in the preparation of your 2020 tax returns and, if you have questions, please reach out to your ACM Wealth Advisor.

All information is provided for guidance and information purposes only.  The information contained herein has been compiled from sources deemed reliable and it is accurate to the best of our knowledge and belief. Advisors Capital Management is not an accounting firm and this information should not be interpreted as accounting or tax advice.  Please contact your tax preparer or tax adviser for additional information.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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