Understanding Your 2012 Forms 1099 & Details. Need more help? Visit our Online Tax Center at etrade.com/tax or call ETRADE-1 ( )

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1 Understanding Your 2012 Fms 1099 & Details Need me help? Visit our On Tax Center at etrade.com/tax call 1800ETRDE1 ( )

2 n imptant notice our cusmers holding certain s, including, but not limited : real estate trusts, widely held fixed trusts, regulated companies: Some companies may reclassy e me income payments in 20. F example, iginal income may have en paid in 2012 as an dinary dividend, but it may reclassied a capital a ntaxable return capital distributi in 20 by company prompting an amended If hold e se types s, may receive e me amended 1099s. This may affect date will want file r tax return. mended tax fms will mailed posted ginning March 20. Sign up f electric document delivery receive noticatis in event an amended tax fm is generated f r account ( F easy access r tax recds, visit our Tax Center at There ll find: Electric copies all r tax documents, statements, and trade cfirmatis. Frequently asked questis and answers f tax fms, tax repting, and cost basis. Tax calculars, tax planning articles, and IRS fms. FREqUENTLY SkED questions F me Frequently sked Questis go etrade.com/tax Q1: Why n t my s losses repted? 1: Cost basis repting rules require E*TRDE rept and IRS infmati about cost securities sell. However, regulatis specy a 4 year phasein period during which time dferent security classes will come covered securities and subject new repting. If d t see s losses r 1099, it is most likely cause security is not yet covered. See additial infmati cost basis rules at etrade.com/tax. Q2: What is dference tween a covered security and a ncovered security my 1099? 2: Your 1099 is broken out in two categies, covered and ncovered. Covered securities display cost basis infmati since January 1, 2011, and this infmati is repted IRS. Ncovered securities (those purchased pri January 1, 2011 not yet a security type is csidered covered) will not display cost basis infmati and respsible f determining cost basis when filing r tax return. Q3. Where can I find my security s iginal purchase infmati (cost basis)? 3: To iginal purchase price r securities, refer Taxable Gains & Losses page located Gains & Losses tab r mthly statements, trade cfirmatis and previous tax documents. These documents available f a rolling seven years. Q4: I bought sold e me optis ctracts during year. Why d t any m appear tax fm sent me? 4. The purchase sale opti ctracts not reptable by financial institutis IRS until cost basis repting rules f optis takes effect in However, we do rept lying sale any positi associated with an optis assignment exercise. Q: I lieve infmati my 1099 is wrg. What can I do? : Send us a Secure Message by logging in r account and clicking Cusmer Service at p page. Or call us at 1800ETRDE1 ( ).

3 SMPLE IMGE OF YOUR E*TRDE SECURITIES 1099 E*TRDE CLERING P.O. OX 484 JERSEY CITY, NJ RECIPIENTS Name, Street ddress, City, State, and Zip Code JOHN DOE 123 NYSTREET DR NYTOWN, ST ccount No: xxxxxxxx ccount Name: John Doe Taxpayer Identicati Numr: ON FILE ccount Executive No: ET1 Copy f recipient 2nd TIN Notice Payer s Federal Identicati Numr: Payer s Name, Street, City, State, Zip Code: E*TRDE CLERING P.O. OX 484 JERSEY CITY, NJ Telephe Numr (800) GROSS PROCEEDS 2012 FORM 1099: PROCEEDS FROM ROKER & RTER EXCHNGE TRNSCTIONS (OM NO ) ox 6a: Covered Transacti ox 6b: Cost asis Repted IRS ox 1c: Type Gain Loss Sht Term (ox 1a) (ox 1b) (ox 8) (ox 1d) (ox 1e) (ox 2a) (ox 3) (ox ) (ox 4) (ox 2b) Fm 8949 Department Treasury Internal Revenue Service Name(s) shown return Sales and Or Dispositis ssets Infmati about Fm 8949 and its separate instructis is at File with r D list r transactis f s 1, 2, 3, 8, 9, and 10 D. OM No ttachment Sequence No. 12 Social security numr taxpayer identicati numr Most brokers issue ir own substitute statement instead using Fm They also may provide basis infmati (usually r cost) statement even it is not repted IRS. efe check ox,, C low, read statement cfully see wher basis was repted IRS. rokers rept basis IRS f most sck bought in 2011 later. Part I ShtTerm. Transactis involving capital assets held e year less sht term. F lgterm transactis, see page 2. You must check ox,, C low. Check ly e. If me than e applies f r shtterm transactis, complete a separate Fm 8949, page 1, f each applicable. If have me shtterm transactis than will fit this page f e me es, complete as many fms with same checked as need. () Shtterm transactis repted Fm 1099 with basis repted IRS () Shtterm transactis repted Fm 1099, but basis was not repted IRS (C) Shtterm transactis f which cannot check ox 1 C D E Date Sale Exchange Date cquisiti Descripti Symbol CUSIP 0/18/12 0/18/12 FCEOOK INC F 30303M102 0/18/12 0/18/12 FCEOOK INC F 30303M102 0/18/12 0/18/12 FCEOOK INC F 30303M102 0/18/12 0/18/12 FCEOOK INC F 30303M102 (a) Descripti property (Example: 100 sh. XYZ Co.) (b) Date acquired (Mo., day, yr.) (c) Date sold disposed (Mo., day, yr.) Quantity Sold , , (d) Proceeds (sales price) (see instructis) Gross Proceeds Less Commissi and Opti Premium (e) Cost basis. See Note low and see Column (e) in separate instructis Cost Or asis 4 ITEMSTotal $190,42.71 $18,74.69 djustment, any, loss. If enter an in column (g), enter a code in column (f). See separate instructis. (f) Code(s) instructis Wash Sale Loss Loss Disallowed (g) mount adjustment Federal Income Tax Withheld $29, $27, $0.00 $32, $32,66.76 $0.00 $4, $4, $0.00 $82, $80, $0.00 (h) Gain (loss). Subtract column (e) column (d) and combine result with column (g) C D E F G H Loss Not llowed Illustrati provided low is assist in standing lat r 1099 tax statement compd IRS Fm You may use D and Fm 8949 rept r gross proceeds as well as cost basis, holding period f shs sold, and loss. Fm 1099 Includes proceeds dispositi securities, including sales, redemptis, exchanges, called bds, returns principal, and dispositis cash. Descripti property Includes security name, symbol, CUSIP, and numr shs sold f scks, ETFs, and bds. Redemptis, exchanges, called bds, returns principal, and dispositis cash will also here. Optis ctracts not reptable Fm 1099 until 2014, but must still repted by r schedule D & Fm Date acquired shs Ncovered securities will not show an acquisiti date Fm 1099 but must still repted by r D & Fm Covered securities will display date acquisiti. C Date sold shs The date closing transacti will appear here f both ncovered and covered securities. D Proceeds shs sold redeemed The proceeds resulting closing transactis. Commissi charges have already en subtracted se s. E Cost asis Ncovered securities will not show cost basis r 1099 tax statement but must still repted by r D & Fm Covered Securities will display infmati ox 3 Fm This is paid f any opening transactis covered securities ly. This was adjusted reflect any cpate actis, including sck splits, name changes, reganizatis, redemptis and commissis and fees. F Code any is enter in column g In der explain any adjustments loss in column (g) Fm 8949, must enter appropriate code in column (f). Please see How To Complete Fm 8949 IRS site ( ) f furr instructis and view code table. G mount djusted, any, loss Include in column any expense sale, such as broker s fees, commissis, local and state taxes, unless repted net sales price in column (e). H Gain Loss The loss is d by subtracting cost basis proceeds.

4 SMPLE IMGE OF YOUR E*TRDE SECURITIES 1099DIV SMPLE IMGE OF YOUR E*TRDE SECURITIES 1099DIV SMPLE IMGE OF YOUR E*TRDE SECURITIES 1099DIV 2012 Fm 1099DIV: DIVIDENDS ND DISTRIUTIONS (OM NO ) 2012 Fm 1099DIV: DIVIDENDS ND DISTRIUTIONS (OM NO ) 2012 Fm 1099DIV: DIVIDENDS ND DISTRIUTIONS (OM NO ) 1a Total Dividends $1, a Total Dividends $1, a Total Dividends $1, b Qualied Dividends $1, b Qualied Dividends $1, b Qualied Dividends $1, a Total Gain Distributis 2a Total Gain Distributis 2a Total Gain Distributis 2b Unrecap Sec b Unrecap Sec b Unrecap Sec c Secti c Secti c Secti d Collectibles (28%) 2d Collectibles (28%) 2d Collectibles (28%) Ndividend Distributis C 3 Ndividend Distributis C 3 Ndividend Distributis Federal income tax withheld 4 Federal income tax withheld 4 Federal income tax withheld Investment Expenses D Investment Expenses D Investment Feign Tax Expenses Paid E 6 Feign Tax Paid E 6 Feign Feign Tax country Paid US possessi 7 Feign country US possessi 7 Feign Cash Liquidati country Distributis US possessi F 8 Cash Liquidati Distributis F 8 Cash Ncash Liquidati Liquidati Distributis Distributis F 9 Ncash Liquidati Distributis F 9 10 Ncash Exemptinterest Liquidati Distributis 10 Exemptinterest Specied Exemptinterest private activity bd interest dividents 11 Specied private activity bd interest dividents 11 Specied private activity bd interest dividents SMPLE IMGE OF IRS FORM SMPLE IMGE OF IRS FORM SMPLE IMGE OF IRS FORM. ttach $7,22.28 b Qualied.. ttach $7,22.28 b Qualied... ttach ttach $7,22.28 b Qualied Qualied (loss). ttach D. If not, check here $1,00.00 (loss). ttach D. If not, check here $1,00.00 (loss). (loss). ttach ttach D.. If If not not,, check check here here $1,00.00 SMPLE IMGE OF IRS FORM, SCHEDULE SMPLE IMGE OF IRS FORM, SCHEDULE SMPLE IMGE OF IRS FORM, SCHEDULE List name payer Part II List name payer Part II List List name name payer payer Part II Dividends Dividends (See Dividends instructis (See back instructis and (See instructis (See back instructis instructis and f Fm instructis back back, and and f instructis instructis Fm,, f f Fm Fm.),,, Fm Fm.),,.).) SMPLE IMGE OF IRS FORM, SCHEDULE SMPLE IMGE OF IRS FORM, SCHEDULE D SMPLE IMGE OF IRS FORM, SCHEDULE D distributis. See instructis distributis. See instructis distributis. distributis. See See instructis instructis elow is additial infmati Fm 1099DIV may included in r 2012 Fm 1099 elow is additial infmati Fm 1099DIV may included in r 2012 Fm 1099 & Details. elow F furr infmati, please see detailed repting instructis Instructis Details. is F additial furr infmati, please Fm see 1099DIV detailed may repting included instructis r 2012 Fm 1099 Instructis & page Details. F furr fm. page fm. infmati, please see detailed repting instructis Instructis page fm. Fm 1099DIV Fm 1099DIV Includes all taxable and capital distributis sck and funds. ll pats Includes all taxable and capital distributis sck and funds. ll pats reptable Includes all taxable r federal income and capital tax return, even distributis y were reinvested. sck and funds. ll pats reptable r federal income tax return, even y were reinvested. reptable r federal income tax return, even y were reinvested. qualied Dividends & qualied Dividends Line 1a repts tal & qualied dinary Dividends. This includes tal both dinary and qualied Line 1a repts tal dinary. This includes tal both dinary and qualied Line received all s. Use dinary 1a) less 1a repts received tal dinary all s.. This Use includes dinary tal both dinary 1a) less and qualied qualied 1b) and less expenses ), qualied received all 1b) s. and less Use dinary expenses ), 1a) less actual dinary should repted IRS Fm,. You may also actual qualied dinary 1b) and less should repted IRS expenses Fm, ),. You may also actual rept this Fm (see General Instructis f rept dinary this Fm should repted (see IRS General Fm, Instructis. f You may also file this fm). Shtterm capital distributis pooled s, including regulated companies, treated as rept this file Fm this fm). Shtterm (see capital General distributis Instructis f pooled invest ments, including file this fm). Shtterm regulated capital distributis companies, pooled treated s, in 1a. as dinary dinary including in 1a. regulated companies, treated as dinary in 1a. Line 1b repts qualied. Qualied subject tax rate 1% ( % f Line 1b repts qualied. Qualied subject a tax rate 1% ( % f taxpayers Line in 10% 0% income brackets). efe claiming repted in taxpayers 1b repts in qualied 10% 0%. income brackets). Qualied efe claiming subject a tax rate 1% repted ( % f in 1b taxpayers as qualied, must ensure have satisfied applicable holding period f lying 1b as qualied, in 10% must 0% ensure income brackets). have efe satisfied claiming applicable holding period f repted lying security. 1b Qualied repted IRS Fm,. F full details, please see security. as qualied, Qualied must ensure repted have IRS satisfied Fm, applicable. F holding full details, period please f see lying Dividends security. Qualied and Or Distributis repted in IRS Publicati IRS Fm 0.,. F full details, please see Dividends and Or Distributis in IRS Publicati 0. Dividends and Or Distributis in IRS Publicati 0. Gain Distributis Gain Distributis ox 2a includes Gain Distributis lgterm capital distributis (held f me than e year) ox 2a includes lgterm capital distributis (held f me than e year) ox regulated companies. Lgterm capital s 2a includes lgterm regulated capital distributis companies. (held f Lgterm me than capital e year) s subject lower tax rate 1% ( 0% f taxpayers two lowest income brackets). Depending subject a lower tax rate 1% ( 0% regulated f taxpayers in companies. two lowest Lgterm income brackets). capital s Depending up subject r situati may have rept s IRS Fm,, and/ IRS Fm up r a situati lower tax rate may have 1% ( rept 0% f s taxpayers in IRS Fm two lowest, income, and/ brackets). IRS Fm Depending up D,. mounts f pats es 2b through 2d also taled r D, situati. mounts may have f pats rept s es IRS Fm 2b through, 2d, also and/ taled IRS Fm 2a. However, es 2b through 2d less comm. F me infmati s repted in se 2a. However, D, es. mounts 2b through f 2d pats less comm. F es me 2b infmati through 2d s also taled repted in se es, 2a. However, please es refer 2b IRS through Publicati 2d 0, less Investment comm. F Income me and infmati Expenses. s repted in se es, please refer IRS Publicati 0, Investment Income and Expenses. es, please refer IRS Publicati 0, Investment Income and Expenses. NDividend Distributis (return capital) C NDividend Distributis (return capital) pti C NDividend distributi Distributis ntaxable (return cause capital) it is return cost basis already paid. pti a distributi is ntaxable cause it is a return cost basis already paid. See pti secti a distributi Dividends and Or is ntaxable Distributis cause IRS it is Publicati a return 0, cost Investment basis Income already and See secti Dividends and Or Distributis IRS Publicati 0, Investment Income and paid. Expenses, See secti f instructis Dividends and adjusting Or Distributis r cost basis. Expenses, f instructis adjusting r cost basis. IRS Publicati 0, Investment Income and Expenses, f instructis adjusting r cost basis. Investment Expenses D Investment Expenses Does D not Investment include trading Expenses commissis and ly applies npublicly traded real Does not include trading commissis and ly applies npublicly traded real estate Investment trusts, npublicly traded companies. Please see secti, Does estate not Investment include trading trusts, commissis npublicly and ly traded applies npublicly companies. traded Please see real secti, Investment estate Investment Expenses, trusts, IRS Publicati npublicly 0. traded companies. Please see secti, Investment Expenses, IRS Publicati 0. Investment Expenses, IRS Publicati 0. E Feign Tax Paid Feign Tax Paid Shows E Feign feign Tax tax Paid may able claim as deducti credit. Please refer IRS Shows feign tax may able claim as a deducti a credit. Please refer IRS Publicati Shows feign 14, Feign tax Tax Credit may f able Individuals. claim as a deducti a credit. Please refer IRS Publicati 14, Feign Tax Credit f Individuals. Publicati 14, Feign Tax Credit f Individuals. Liquidati Distributis F Liquidati Distributis Liquidati F Liquidati distributis Distributis distributis receive during partial complete liquidati Liquidati distributis distributis receive during a partial complete liquidati a cpati. Liquidati distributis If it was partial distributis liquidati, receive do not need during a rept partial it complete r tax liquidati return. You adjust a cpati. If it was a partial liquidati, do not need rept it r tax return. You adjust cost cpati. basis If r it was security a partial by liquidati, do partial not need liquidati. rept If it was r complete tax return. liquidati, You adjust n cost basis r security by partial liquidati. If it was a complete liquidati, n cost would basis rept r security liquidati by just like would partial sale liquidati. found If Fm it was would rept liquidati just like would a sale found Fm a complete liquidati, n would rept liquidati just like would a sale found Fm 1099.

5 PLESE RED THE IMPORTNT DISCLOSURES ELOW E*TRDE Financial Cpati and its affiliates do not provide tax advice, and always should csult r own tax adviser regarding r persal circumstances fe taking any acti may have tax csequences. The fms and statements shown f illustrative purposes ly. The E*TRDE Financial family companies provides financial services include trading, investing, and banking. Securities products fered by E*TRDE Securities LLC, Memr FINR/SIPC. Your brokerage account is carried by E*TRDE Clearing LLC, Memr NYSE/FINR/SIPC. E*TRDE Securities and E*TRDE Clearing separate but affiliated companies. 20 E*TRDE Financial Cpati. ll rights reserved CONP6209