This brochure is designed to help you understand tax law changes for debt investments and money market funds that may impact your
tax reporting. Because tax reporting for these investments can be complicated, it’s important to consult a qualified tax professional
or review the Internal Revenue Service (IRS) 2016 Instructions for Schedule D (and Form 8949) and IRS Publication 550, Investment
Income and Expenses, to ensure your tax return is accurate.
Please provide this brochure to your tax preparer or use it when completing your tax return.
Summary of cost basis reporting
Online Resources
• To
see transactions and history for your Ameriprise
accounts, log in to the secure site on ameriprise.com
• For
more information about cost basis reporting
regulations, wash sales and average cost method visit
ameriprise.com/costbasis
• To
find IRS forms, publications and other information
visit irs.gov
Important 2016 tax
information
Debt instruments and
money market funds
On Jan. 1, 2014, certain less-complex debt instruments and
options became covered by these rules. These include certain
bonds and other debt instruments with a fixed interest rate,
payment schedule, and maturity. It also includes both long
and short options on covered investments (or their financial
attributes). Additionally, new regulations for including and tracking
your elections for market discount and bond premium were
introduced for covered bonds. When you purchase covered
bonds at a premium or at a discount, you may make elections
which can affect the earnings on your bonds and the character of
your bond income, and affect your cost basis and tax reporting.
Brokers are now required to include and track your bond
elections and apply an IRS-required broker default unless you
made an alternate election.
New rules may impact your tax reporting
On Jan. 1, 2016, new investment types (see table) became
covered by these rules. The information you’ll find within
your 2016 tax statement package will apply to your specific
investments and account activity. This brochure focuses on
tax reporting information for complex debt instruments and
institutional money market funds.
New investments covered in 2016
The following investments purchased on or after Jan. 1, 2016, are
subject to cost basis and holding period reporting.
Ameriprise Financial
370 Ameriprise Financial Center, Minneapolis, MN 55474
ameriprise.com
“We,” “our” and “us” mean Ameriprise Financial Services, Inc. (“Introducing
Broker” or “Ameriprise Financial”) and/or American Enterprise Investment
Services Inc. (“Clearing Broker” or “AEIS”).
Ameriprise Financial and its representatives do not provide tax or legal advice.
Consult your tax advisor or attorney regarding specific tax issues.
All securities transactions are cleared by American Enterprise Investment
Services Inc., a wholly owned subsidiary of Ameriprise Financial, Inc. Ameriprise
Financial Services, Inc. Member FINRA and SIPC. Custody, clearance and
trading functions made available through American Enterprise Investment
Services Inc. (AEIS), Member SIPC and FINRA. Both AEIS and Ameriprise
Financial Services, Inc. are subsidiaries of Ameriprise Financial, Inc.
© 2017 Ameriprise Financial, Inc. All rights reserved.
111255 D (1/17)
Noncovered investments
Since January 1, 2011, the IRS has phased in cost basis and
holding period reporting rules that affect increasing types
of investments. Ameriprise Financial reports cost basis and
holding period information for sales and dispositions of these
investments to you and the IRS to comply with tax law and
regulations. Whether an investment is covered by these rules
depends on the type of investment and when you bought it:
investments you purchase on or after the “phase-in” date are
covered by the requirements. However, the same investment that
you purchased prior to the “phase-in” date are not.
•C
omplex debt instruments
such as:
– Contingent payment debt
instruments (timing or
amount of interest or
principal is uncertain,
includes some Structured
Products)
– Convertible bonds
– Non-dollar denominated
debt, and debt issued by
foreign (non-U.S.) entities,
including “Yankee Bonds”
– Inflation indexed bonds
– Payment in-kind bonds (PIK)
– Physical certificates
– Preferred securities treated
as debt for tax purposes
– Stripped bonds or stripped
coupons
– Tax credit bonds
– Variable rate & stepped
rate bonds
• Debt instruments issued
with an option as part of an
investment unit
• Debt without a prospectus,
offering memorandum, or
other descriptions of the
debt’s terms & conditions
• Ameriprise®certificates
The following investments are currently excluded from cost basis
reporting regulations. We will provide cost basis information for
these investments to you, if available, but will not report cost basis
to the IRS.
•D
ebt instruments secured by
a pool of loans that are subject
to prepayment of principal
including:
– Certain Asset-Backed
Securities (ABS)
– Mortgage-Backed Securities
(MBS)
– Real Estate Mortgage
Investment Conduits (REMIC)
• Employee Stock Options
(once exercised the stock
itself is covered)
• Grantor Trusts
• Master Limited Partnerships
• Money market funds
• Options on commodities
(gold, oil, metals, grains, etc.)
• Pre-paid forward contracts
• Short-term debt instruments –
fixed maturity date not
more than 1 year after the
issuance date
Potential tax implications for institutional money
market funds
If you own an institutional money market fund, you may be
impacted by new rules. In October 2016, the Securities and
Exchange Commission (SEC) began requiring institutional money
market funds to have a floating net asset value (NAV), unlike
other money market funds that attempt to maintain a stable
$1.00 NAV.1 This means that the institutional money market
funds are more likely than other money market funds to have
gains and losses resulting from share redemptions and sales in
nonqualified accounts.
What this means to you:
•Y
our Ameriprise financial advisor can help you understand if
any of your investments fall in this category
• Institutional money market funds are exempt from tax reporting
on share redemptions and from wash sale rules
•A
meriprise will not issue Form 1099-B, Proceeds From Broker
and Barter Exchange Transactions, for sales or redemptions
from these investments
will provide cost basis information to you on the
• Ameriprise
supplemental statement “Proceeds Not Reported to the IRS”
– If you use the Ameriprise default average cost tax lot method
to determine your cost basis, the Additional information
column will display code MA
– If you request the alternative “NAV” method to determine
your cost basis, the Additional information column will display
code MN
Consult your financial advisor to determine how the new money
market rules affect your money market fund investments, and
work with your tax advisor to track cost basis and wash sales
and to report gains and losses, if applicable.
1
2
Government and retail money market funds will generally maintain a stable $1 NAV.
NAV method requests must be submitted in writing to your financial advisor.
AMERICAN ENTERPRISE
INVESTMENT SERVICES INC.
Tax reporting for complex debt investments
Each debt instrument that you may own has certain unique
features and available elections which may affect the earnings
on your investments, the character of the income, cost basis
and tax reporting. The following information illustrates some
general tax reporting information that may be applicable to you
depending on your debt investment(s) and 2016 account activity.
Information about the features and tax implications of specific
investments is available at ameriprise.com/costbasis.
2016
Summary Information
2
This line will display 0.00 if you are using the
– Note:
broker default and deferring market discount
11, 12 and 13 report bond premium for covered
• Lines
tax lots
• Covered amortized bond premium is reported on Line 11
• Bond
premium from Line 13 is subdivided into two
categories that correspond to the different types of
interest income on Lines 8, and 9
2Tax-exempt original issue discount (OID) on OID bonds, if any,
is provided as supplemental information for you to use when
preparing your tax returns. This information is not reported to
the IRS.
3Original Issue Discount Summary
This section contains totals for the information on Form
1099-OID, Original Issue Discount. This summary information
is not reported to the IRS.
• The dollar amount in the “Market discount (covered lots)”
line is the total of amounts found on Line 5 “Market
discount” of Form 1099-OID, but only if you have elected to
recognize market discount as it accrues
– Note:
This line will display 0.00 if you are using the
broker default and deferring market discount
• The
dollar amount in the “Total acquisition premium (total
for covered lots categorized below)” line is the total of
amounts found on Line 6 “Acquisition premium” of Form
1099-OID
– Acquisition premium for “Non-Treasury obligations”
and “Treasury obligations” is displayed separately
underneath the total
1234578910111213-
Interest income (not included in line 3)
769.75
Early withdrawal penalty
0.00
Interest on US Savings Bonds & Treasury obligations
0.00
0.00
Federal income tax withheld
Investment expenses
0.00
Foreign country or US possession:
6- Foreign tax paid:
0.00
Tax-exempt interest (includes line 9)
5,367.02
Specified private activity bond interest (AMT)
0.00
Market discount (covered lots)
0.00
Bond premium (covered lots)
0.00
Bond premium on Treasury obligations (covered lots)
0.00
Bond premium on tax-exempt bonds (categorized below)
0.00
Tax-exempt obligations (covered lots)
0.00
Tax-exempt private activity obligations (AMT, covered lots)
0.00
14- Tax-exempt and tax credit bond CUSIP number
See detail
The following amounts of tax-exempt original issue discount are not reported to the IRS.
Tax-exempt original issue discount (includes the line below)
Tax-exempt original issue discount private activity bonds (AMT)
3
12345678
Adjustment to interest and original issue discount
02//05/2017
This section summarizes the following information for your
reference:
ADJUSTMENTS TO INTEREST AND ORIGINAL ISSUE DISCOUNT
OMB No. 1545-0112
The amounts in this section are not reported to the IRS. They are presented here for your
reference when preparing your income tax return(s).
6
111.30
0.00
Taxable accrued interest paid
Taxable accrued Treasury interest paid
Tax-exempt accrued interest paid
Tax-exempt accrued interest paid (AMT)
Taxable accrued nonqualified interest paid
Tax-exempt accrued nonqualified interest paid
Tax-exempt accrued nonqualified interest paid (AMT)
Nonqualified interest
Tax-exempt nonqualified interest
Tax-exempt nonqualified interest (AMT)
Interest shortfall on contingent payment debt
Bond premium- Non Treasury obligations (noncovered lots)
Bond premium- Treasury obligations (noncovered lots)
Bond premium- Tax-exempt obligations (noncovered lots)
Bond premium- Tax-exempt obligations (AMT, noncovered lots)
Acquisition premium- Non Treasury obligations (noncovered lots)
Acquisition premium- Treasury obligations (noncovered lots)
Acquisition premium- Tax-exempt obligations (all lots)
Acquisition premium- Tax-exempt obligations (AMT, all lots)
Market discount (noncovered lots)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4
5
7
The amounts in this section are not reported to the IRS. They are presented here for your
reference when preparing your income tax return(s).
Other Receipts & Reconciliations- Partnership distributions
7,730.00
Other Receipts & Reconciliations- Foreign tax paid- partnership
0.00
Other Receipts & Reconciliations- Return of principal
0.00
Other Receipts & Reconciliations- Deferred income payment
0.00
Other Receipts & Reconciliations- Deemed premium
3,061.47
Other Receipts & Reconciliations- Income accrual- UIT
0.00
Other Receipts & Reconciliations- Basis adjustments
0.00
Other Receipts & Reconciliations- Foreign tax pd beyond treaty
0.00
Fees & Expenses- Margin interest
0.00
Fees & Expenses- Dividends paid on short position
0.00
Fees & Expenses- Interest paid on short position
0.00
Fees & Expenses- Non reportable distribution expense
0.00
Fees & Expenses- Other expenses
0.00
STATE
TAXENTERPRISE
WITHHELD
AMERICAN
Account 12345678
Fees & Expenses- Severance tax
0.00
Fees & Expenses- Organizational expense
0.00
Use
the details of the
State Tax Withholding
page(s) to determine the appropriate amounts for
INVESTMENT
SERVICES
INC.
Proceeds
from
Broker
and
Barter
Exchange
Transactions
Fees & Expenses- Miscellaneous fees
0.00
your income tax return(s). The amounts shown in this section are for your reference.
Fees & Expenses- Tax-exempt investment expense
0.00
2016
1099-B*
OMB
No.
1545-0715
02/05/2017
1099-DIV total withheld
0.00
Foreign Exchange Gains & Losses- Foreign currency gain/loss
0.00
1099-INT total withheld
0.00
Sales transactions are grouped by their term (long, short or undetermined) and covered status (covered or noncovered). For tax lots whose term is undetermined, use your historical documents to
1099-OID total withheld
0.00
establish the cost basis and date of purchase. Tax lots with an additional notation as “Ordinary” represent neither short- nor long-term capital transactions. You may wish to consult with your tax
1099-MISC total withheld
0.00
advisor, the IRS or your state tax authority regarding the proper treatment.
1099-B total withheld
0.00
Use bond-by-bond details from the Form 1099-OID page(s) to determine amounts of Original
Issue Discount income for your income tax return(s). The amounts shown in this section are for
your reference when preparing your income tax return(s).
Original issue discount for 2016
647.27
Early withdrawal penalty
0.00
Federal income tax withheld
0.00
Market discount (covered lots)
0.00
Acquisition premium (total for covered lots, categorized below)
0.00
Non Treasury obligations
0.00
Treasury obligations
0.00
Original issue discount on Treasury obligations
0.00
Investment expenses
0.00
interest paid are displayed on separate lines. Any of these
amounts may include accrued interest to acquire debt
between payment dates, if applicable.
5Nonqualified interest is subdivided into three categories.
This reflects interest on a bond, where that taxability
is reported on 1099-OID or tax-exempt original issue
discount.
(including certain structured products) occurs when the
interest is less than the projected payment for a contingent
payment debt instrument.
7“Bond premium”, “Acquisition premium” and “Market
8
discount” in this section display 0.00. We are unable to
provide this information for noncovered bonds. Please
consult your own records and work with a qualified tax
professional to determine how to calculate and report this
information on your tax returns.
8Reverse convertible debt instruments may have option
premium which is reported as Other Receipts and
reconciliations — Deemed premium”
Form 1099-B, Proceeds From Broker and Barter
Exchange Transactions
9The “Additional information” column will display the
Closing of written options is presented in a distinct manner in accordance with IRS regulation. For these transactions the Cost or other basis (column 1e) is always presented as $0.00 and the Proceeds
(column 1d) is the net of proceeds received when the option was written and the cost to close the position.
notation “Ordinary” to report sales and maturities of
contingent payment debt instruments.
AMERICAN ENTERPRISE
Account 12345678
Several column headings describe two related items: a quantity and a qualifier. For example, proceeds and, if the sale is the result of an option exercise or assignment, whether the proceeds are gross
INVESTMENT
SERVICES
INC.
or
net (adjusted for
any option premium).
When these Proceeds
conditions exist,from
the qualifier
is shown
to theBarter
right of the
amount.
Broker
and
Exchange
Transactions
2016 filing
1099-B*
OMB No.[ 1545-0715
FATCA
requirement
]
4The various types of taxable and tax-exempt accrued
6Interest shortfall on contingent payment debt instruments
RECONCILIATIONS, FEES, EXPENSES AND EXPENDITURES
ORIGINAL ISSUE DISCOUNT SUMMARY
1Form 1099-INT, Interest Income:
• Line 10 reports market discount, but only if you have
elected to recognize market discount as it accrues
2016 1099-INT
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.
How to read your tax statements
“Summary Information” is found on two pages within your tax
package. Only the second page is displayed here to illustrate the
reporting information.
(continued)
INTEREST INCOME
1
Account
Summary Information
10Line 1e, Cost or other basis, will not reflect adjustments for
02/05/2017
accrued market discount since that amount is reported on
Line 1f.
Sales transactions are grouped by their term (long, short or undetermined) and covered status (covered or noncovered). For tax lots whose term is undetermined, use your historical documents to
establishTERM
the costTRANSACTIONS
basis and date of purchase.
Tax lots with anTAX
additional
notation
as “Ordinary”
short- nor long-term
capital transactions.
You may
wish to(Lines
consult
LONG
FOR COVERED
LOTS
[Ordinary
gainsrepresent
or lossesneither
are identified
in the Additional
information
column]
2 &with
5) your tax
advisor,
IRS8949,
or your
state
tax Box
authority
regarding
theisproper
treatment.
Report
onthe
Form
Part
II with
D checked.
Basis
provided
to the IRS. (Line 3)
“Gain or loss (-)” and “Additional information” are NOT reported to the IRS.
Closing of written options is presented in a distinct manner in accordance with IRS regulation. For these transactions the Cost or other basis (column 1e) is always presented as $0.00 and the Proceeds
1aDescription
of property/CUSIP/Symbol
(column
1d) is the
net of proceeds received when the option was written and the cost to close the position.
1c- Date
1d- Proceeds &
1f- Accrued mkt disc (D)
Gain or loss(-) &
Several
and a qualifier.
example, proceeds
the result
an option
exercise
or assignment,
whether the proceeds are gross
sold
or column headings describe two related items: a quantity
6- Reported
1b-For
Date
1e- Costand,
or if the sale
1g-isWash
sale of
loss
7- Loss
not allowed
(X)
or net (adjusted for any option premium).
is shown toother
the right
of the amount. disallowed (W)
disposed
Quantity When these conditions
(G)ross orexist,
(N)et the qualifier
acquired
basis
also not reported (Z) Additional information
JPM
CHASE
VAR 053033[ /] CUSIP: 48124JC55 / Symbol:
FATCA
filingBKrequirement
01/12/16
10,000.000
8,994.00
08/22/15
9,083.50
0.00
-89.50
Sale
923.19
Redemption
Original basis: $10,278.10
Ordinary
gain/loss
LONG TERM TRANSACTIONS FOR COVERED TAX LOTS [Ordinary gains or losses are identified in the Additional information column]
(Lines
2 & 5)
Report DADE
on Form
Part II /with
Box D
checked. Basis
is provided to the IRS. (Line 3)
MIAMI
FL8949,
0.0 100140
CUSIP:
59333NKD4
/ Symbol:
“Gain or loss (-)” and “Additional information” are NOT reported to the IRS.
09/06/16
45,000.000
12,894.99
02/20/14
1a- Description of property/CUSIP/Symbol
1c- Date
Totals
:
sold or
disposed
Quantity
1d-21,888.99
Proceeds &
6- Reported
(G)ross or (N)et
11,873.97
97.83 D
1b- Date
acquired
20,957.47
1e- Cost or
other basis
1f- Accrued mkt97.83
disc (D)
D
1g- Wash sale loss
disallowed (W)
08/22/15
9,083.50
Gain or
loss(-) &
833.69
7- Loss not allowed (X)
also not reported (Z) Additional information
JPM CHASE BK VAR 053033 / CUSIP: 48124JC55 / Symbol:
01/12/16
10,000.000
8,994.00
0.00
-89.50
Sale
Ordinary gain/loss
Redemption
Original basis: $10,278.10
9
MIAMI DADE FL 0.0 100140 / CUSIP: 59333NKD4 / Symbol:
09/06/16
Totals :
45,000.000
12,894.99
21,888.99
02/20/14
11,873.97
97.83 D
923.19
20,957.47
97.83 D
833.69
– Acquisition premium offsets OID and reduces taxable
income
* 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. Remember, taxpayers are ultimately responsible for the accuracy of their tax return(s).
10
The statement image shown is for illustrative purposes
only and is not meant to represent any specific investment
or to imply any guaranteed rate of return. Your actual tax
statement may be slightly different than the statement
image shown in this brochure