Tax Center

Specific tax information for PGIM Investments mutual funds to help you prepare your tax return.

General Tax Questions

  • Most tax forms are mailed between January 31 and February 15 for the prior tax year. The type of account you have and the activity in your account will determine which tax form(s), if any, you will receive. A tax form will be generated if you made a transaction or if you received $10 or more in dividends and/or capital gain distributions in each fund.

  • This is most likely because your fund reclassified a portion of its dividend, short-term capital gain, or long-term capital gain distributions. When a reclassification occurs, the total distributions remain the same, but the breakdown of the distributions changes. As a result, the distributions reported on your tax form will not match the amount on your year-end statement. You should use the amount(s) on your tax form to file your taxes.

  • Generally, you will not receive Form 1099-DIV if your distributions are less than $10. However, because a portion of the total dividend was reclassified as a non-taxable distribution (return of capital), we are required to report the distribution even though it was less than $10. The amount that is reclassified as a non-taxable distribution is reported in Box 3 of Form 1099-DIV.

  • You can get your tax forms faster by signing up to receive your tax forms through our e-Delivery service. You can sign up for this feature online when you access your account at www.prudentialfunds.com/myaccess. Once online, select the "Mutual Funds" tab and then click on "E-Delivery Preferences" and complete your updates.

    While online, you can also take advantage of e-Delivery for mutual fund statements, transaction confirmations, and shareholder reports. In addition, you can print a copy of your recent tax forms online.

    You may also obtain a duplicate tax form by calling the Prudential Mutual Fund Service Center at (800) 225-1852.

     

     

  • At the end of each January, the Supplemental Tax Information brochure is made available online through our Tax Center.

     

Capital Gains Questions

  • At the end of each January, the Supplemental Tax Information brochure is made available online through our Tax Center.

  • It's a gain on an investment that has been held for more than one year. The maximum tax rate for a long-term capital gain is 20% plus an additional 3.8% Medicare tax for certain individuals.

     

  • It's a gain on an investment that has been held for one year or less. Short-term capital gains are taxed at the same rates as ordinary income and interest. Tax rates for short-term gains can range as high as 39.6% plus an additional 3.8% Medicare tax for certain individuals.

     

  • When a mutual fund generates income from its holdings or sells shares of stock and receives a capital gain, it is required by law to pay most of the income and gain, minus the fund's operating expenses, to its shareholders in the form of distributions.

  • Even if a fund's share price has fallen, it is possible for the fund to have realized capital gains on stocks that it sold during the year. For example, the fund could sell a stock that has gone up significantly since the fund bought it, but whose price has recently declined. If the price when the stock is sold remains higher than what the fund paid for it, the fund has still realized a gain, which it must pass along to its shareholders as a taxable capital gain. The fund could have gains in many individual stocks, but those gains may be outweighed by losses in other stocks, resulting in a lower net asset value.

Cost Basis Reporting Questions

  • Cost basis is the original value of an asset for tax purposes (usually the gross purchase amount), adjusted for stock splits, reinvested dividends, and return of capital distributions. This value is used to determine the capital gain (or loss), which is the difference between the asset's cost basis and the gross proceeds when the asset is sold or exchanged.

     

  • PMFS supports 10 cost basis methods, providing you with ample choices and flexibility to determine the method that best meets your needs.

    1. Average Cost - Under this method, we use the average basis of all shares owned at the time of redemption, regardless of how long you owned them, to arrive at the average cost. To determine the holding period, the shares sold are considered to be those acquired first. Determination of the holding period is important for designating whether a gain is long-term or short-term.
    2. First In First Out (FIFO) - This method keeps track of every tax lot of shares purchased. When calculating gain or loss, this method depletes tax lots in the chronological order in which available lots were acquired.
    3. Specific Lot Depletion Method (SLDM) - This method allows shareholders to choose which tax lots they are selling, thereby giving shareholders more control over whether they will generate a gain or loss on the transaction. Shareholders must specify the particular tax lots to be sold no later than the settlement date of the redemption. (For shares held at PMFS, the settlement date is the same date as the redemption date.) The gain or loss will vary, depending on which shares they choose. This method cannot be pre-selected as a default method on your account. Also, this method cannot be selected for systematic transactions such as Systematic Withdrawal Plans (SWPs), systematic exchanges, and exchange rebalancing among multiple funds.
    4. Last In First Out (LIFO) - The most recent shares acquired will be redeemed first.
    5. Highest Cost In, First Out (HIFO) - The highest cost shares will be redeemed first.
    6. Highest Cost Long-Term In, First Out (HILT) - The long-term highest cost shares will be redeemed first.
    7. Highest Cost Short-Term In, First Out (HIST) - The short-term highest cost shares will be redeemed first.
    8. Lowest Cost In, First Out (LOFO) - The lowest cost shares will be redeemed first.
    9. Lowest Cost Long-Term In, First Out (LILT) - The long-term lowest cost shares will be redeemed first.
    10. Lowest Cost Short-Term In, First Out (LIST) - The short-term lowest cost shares will be redeemed first.
  • No. You may have a different cost basis method for each fund in your account. You may select any of the methods described earlier for shares acquired on or after January 1, 2012 for most Prudential mutual funds.  For the Prudential Jennison MLP Fund, the only allowable cost basis methods are FIFO, LIFO, and SLDM. Please keep in mind that if you own different account numbers or accounts with different registrations, you should provide instructions on the cost basis method for each of your accounts.

     

  • Yes. The new cost basis reporting requirements apply only to shares purchased on or after January 1, 2012. The cost basis regulations treat shares acquired before the effective date of January 1, 2012, as if they are in a separate account (bifurcated) from shares acquired after the effective date. Please also keep in mind that PMFS is not required to report cost basis to you or the IRS on shares purchased before January 1, 2012. However, since you are still required to report cost basis on your personal tax return, in most cases PMFS will provide cost basis information to you as a service and it will be clearly indicated on Form 1099-B that cost basis information is being provided on shares acquired before January 1, 2012.

  • You will only need to inform us of your cost basis election if you would like to select a different cost basis method than PMFS' default method. PMFS' default method is Average Cost for most Prudential mutual funds and it is First In First Out (FIFO) for the Prudential Jennison MLP Fund. If you accept PMFS' default method for your taxable transactions on shares acquired on or after January 1, 2012, then no action is required on your part.

    If you would like to make a different cost basis election than PMFS' default method, you may make your election online when you access your account at www.prudentialfunds.com/myaccess. Once online, choose "My Account Options," then select "View/Change" from the "Cost Basis Method Elections" section and complete your updates.

    You may also submit your cost basis election to us in writing by completing the Cost Basis Election Form (MF1007) or by calling the Prudential Mutual Fund Service Center at (800) 225-1852, Monday through Friday between 8:00 a.m. and 6:00 p.m. Eastern time. Note: If, after making an initial cost basis election or accepting the default method, you want to change your cost basis method from Average Cost to another method, or from another method to Average Cost, under current IRS regulations, that change must be submitted to us online or in writing.

2017 Dates to Remember

January 4th

PGIM Investments begins mailing year-end statements

 

April 18th

Last day to establish and contribute to a 2016 traditional IRA, Roth IRA, or Coverdell Education Savings Account. Last day to file federal tax return (without extensions).

 

October 16th

Last day to establish or fund SEP Plan for 2016. Due date for employer's tax return, including extensions, which in 2016 may be as late as 10/16.

 

January 31st

Mailings of tax forms 1099-DIV, 1099-B, 1099-R, and 1099-Q begin (1/31/2017 - 2/15/2017)

 

May

Mailings of Form 5498 (Traditional, Roth or SEP) or Form 5498-ESA (Coverdell Education Savings Account)

Consider a fund's investment objectives, risks, charges and expenses carefully before investing. The prospectusopens in a new window and the summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and the summary prospectus. Read them carefully before investing.

An investment in our money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your clients investment at $1.00 per share, it is possible to lose money by investing in the funds.

Mutual fund investing involves risk. Some mutual funds have more risk than others. The investment return and principal value will fluctuate and investor's shares when sold may be worth more or less than the original cost. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. Asset allocation and diversification do not assure a profit or protect against loss in declining markets. There is no guarantee a Fund's objectives will be achieved. The risks associated with each fund are explained more fully in each fund's respective prospectus. Your clients should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation.

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.

Investment products are distributed by Prudential Investment Management Services LLC, a Prudential Financial company, member SIPC. Jennison Associates and PGIM, Inc. (PGIM) are registered investment advisors and Prudential Financial companies. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM. PGIM Fixed Income and PGIM Real Estate, are units of PGIM. © 2017 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, PGIM and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

Prudential Financial, Inc. of the United States is not affiliated with Prudential plc. which is headquartered in the United Kingdom.

Investment Products: Are not insured by the FDIC or any other federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.

 

For Compliance Use Only:0308561-00001-00 Ed. 08/2017