Why doesn't my form 1099-DIV match my year-end statement?

Putnam determines each fund's taxable income and capital gains after mailing your annual statement. At year-end, it is sometimes necessary for Putnam to adjust a fund's distributions to properly reflect the fund's actual taxable income and capital gain for the year. This process is known as reallocation. For example, in some cases a fund must reallocate ordinary dividends (short-term capital gains) to long-term capital gains. Thus, if a reallocation occurred on a fund in which you have an investment, the information provided on your annual statement and Form 1099-DIV will differ.

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Why aren't short-term capital gains listed separately on my form 1099-DIV?

The IRS requires that short-term capital gains paid by mutual funds be treated as ordinary dividend income on Form 1099-DIV.

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Are reinvested dividends used to purchase additional fund shares taxable to me?

Yes. They are taxable whether you take the dividends in cash or reinvest them in additional fund shares.

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What are qualified dividends?

Qualified dividends are those received by an individual shareholder from domestic or qualified foreign corporations that may be eligible (depending on holding period, etc.) to be taxed at the reduced capital gains tax rates. Review IRS Publication 550 and consult your tax advisor for more information.

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Why did I receive a Form 1099-DIV for my Uniform Gift or Uniform Transfer to Minors Account?

The IRS requires us to report all income, no matter the age of the account holder. Minors who have earned over a certain dollar amount may be required to file a Federal Income Tax Return. You may want to consult your tax advisor regarding your reporting situation.

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What are the holding period requirements associated with qualified dividends?

Generally, a security must be held more than 61 days of the 121-day holding period surrounding the security's ex-dividend date to qualify for favorable tax treatment of the dividend. With distributions from mutual funds the holding period requirement applies on both the fund level and the shareholder level. This means that in order for a dividend to be qualified, the fund must have held the security for at least 61 days of the 121-day period. On your Form 1099-DIV, Putnam will provide you with the total of qualified dividends, based on the fund's holding period; however, in order for the dividend to actually qualify, you must have also held the mutual fund shares for at least 61 days of the 121-day period. To calculate your holding period, count the number of days you held the shares starting with the day after the shares were purchased. If the shares were sold, count the number of days held, including the date sold.

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Why are nondividend distributions listed on Form 1099-DIV?

Nondividend distributions are distributions from your fund which are a return of capital to you. You must reduce your cost (or other basis) by the amount shown in Column 3. However, if you get back all of your cost (or other basis), you must report future nontaxable distributions as capital gains even though Form 1099-DIV shows them as nontaxable. Review Publication 550 for assistance in determining if the amount shown in Column 3 is truly nontaxable to you.

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Why did I receive Form 1099-DIV for my tax-exempt fund?

Capital gains distributed from any fund are fully taxable. If the tax-exempt fund in which you invested earned short- or long-term capital gains from the sale of securities held in the fund's portfolio, the fund is required to distribute these capital gains in addition to its regular tax-exempt dividends. The fund must also distribute taxable ordinary income resulting from the sale of certain bonds purchased at a discount by the fund. These taxable distributions, as well as any short-term capital gains are reported to you and the IRS (as required) in Column 1a of your Form 1099-DIV, under Total Ordinary Dividends. Long-term capital gains are reported in Column 2a of your Form 1099-DIV, under Total Capital Gain Distributions. You must include these taxable distributions when preparing your income tax return(s).

Income from U.S. Government Securities

Several Putnam Funds invest at least a portion of their assets in U.S. Treasury securities. Since interest income from U.S. Treasury obligations is often exempt from state and local taxation, this could translate into a state tax break for you. Your applicable Treasury income from your fund was based on your state of residence as of the last business day of the calendar year and was calculated in accordance with the rules for your state.

However, certain states currently differ in their treatment of passthrough of U.S. Treasury income from mutual funds. Therefore, you should consult your own tax advisor, accountant, or state department of revenue to determine what restrictions, such as threshold requirements, your state may impose on this exemption.

Putnam also calculates each fund's Treasury, GNMA , direct federal obligation and other mortgage-backed security asset percentages.

Please contact us for the current Treasury Income/Asset information on any Putnam fund.

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Foreign Taxes Paid

Mutual Funds that invest in foreign equity securities earn dividends and pay taxes on those dividends to various countries. This payment of foreign taxes is a fund expense. If a fund has more than 50% of its assets invested in foreign securities, the fund may elect to pass through this foreign tax expense to its shareholders, giving them the opportunity to claim either a foreign tax credit or a deduction. Shareholders in a fund which has made this election are placed in the same position as a person directly owning the foreign security. As such, the shareholder must include in their gross income (in addition to taxable dividends actually received), their proportionate share of such foreign taxes paid.

Since the Foreign Tax Paid amount on Form 1099-DIV, column 6, is included in the Total Ordinary Dividends amount in column 1a, the shareholder may choose between taking a credit or deduction for the Foreign Tax Paid on their Form 1040.

Please contact us for a complete listing of all Putnam foreign equity funds along with their total ordinary dividends distributed per share from securities in various countries and the foreign tax paid by the fund to those countries.

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Dividends-Received Deduction for Corporate Shareholders

Putnam calculates the percentage of each fund's Qualifying Dividends eligible for the corporate dividends received deduction. Corporate shareholders may contact us for this information.

Why did I receive a Form 1099-B/Cost Basis when I only exchanged shares?

An exchange of non-Money Market mutual fund shares is considered a taxable event. An exchange is treated as a "sell" transaction in which shares are sold out of the original fund and purchased into the receiving fund(s).

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What is the difference between long-term and short-term for tax purposes?

If you sold shares held more than one year, the resulting gain or loss is considered long term, while shares held one year or less generate a short-term gain or loss. Long-term gains realized from your sale of fund shares, as well as those distributed by your fund, are taxed at a reduced capital gains tax rate while short-term gains and ordinary income dividends could be taxed at a higher tax rate.

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How do I determine my gain or loss from the sale of fund shares?

As an additional service to its shareholders, Putnam calculates the cost basis and the resulting gain or loss for each sale of fund shares during the year.

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How does the Contingent Deferred Sales Charge (CDSC) affect my cost basis?

Gain/loss calculations are made based on the total amount of the redemption. CDSC is treated as an addition to the basis of your shares redeemed.

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What is a wash sale?

A wash sale occurs when shares are redeemed at a loss and all or a portion of the shares are repurchased (including reinvested dividends) within a 61-day period, beginning 30 days before the sale and ending 30 days after the sale. All or a portion of any loss resulting from that sale is disallowed by the IRS and must be added into the average cost basis of the repurchase shares.

NOTE: Wash sale information is reported in Box 1f/1g.

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How does a return of capital affect my cost basis?

Return of capital distributions reduce your cost basis. For example, if your Cost Basis is $1,000 and you received a return of capital of $100, your cost basis is reduced to $900.

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Why is the cost basis information not available on my account?

Generally, if the initial investment to your account was made prior to 1985 or the shares referenced were transferred from another account opened prior to 1985, then we are unable to provide your Cost Basis information.

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Is there an example of the average cost basis?

A shareholder makes three investments over time, purchasing:

150 shares on February 3, 1992, at $9 per share

100 shares on September 15, 1999, at $11.50 per share

250 shares on January 4, 2013, at $12 per share

The shareholder's investment amount is $5,500 with a balance of 500 shares.

The shareholder decides to sell 300 shares on October 15, 2013.

The price per share on October 15, 2010, was $15, giving the shareholder $4,500.

Are contributions to a Coverdell ESA deductible?

Contributions to a Coverdell ESA are not deductible; however, earnings accumulate tax free and qualified withdrawals are nontaxable.

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How many Education Savings Accounts may a child have?

There is no limit to the number of accounts a child can have. However, the total contributions per year to all accounts combined cannot exceed $2,000.

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Can I also fund a Coverdell ESA if I currently have a 529 account?

Yes, the law permits contributions to both a Coverdell ESA and 529 in the same year for the same beneficiary.

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What are the benefits of opening a Coverdell ESA account?

It gives you the opportunity to contribute up to $2,000 per child per year to save for primary or secondary education; it gives you the ability to make contributions until April 18, 2016, for tax year 2015; it gives you the ability to make tax-free withdrawals as long as the money is used for qualified educational expenses; and it gives you the ability to transfer the account to another family member without penalties or taxes. The $2,000 contribution limit may be reduced if certain income limitations are exceeded by the transferor.

Why does the earnings column on Form 1099-Q only list earnings from excess contributions?

For Coverdell ESA contributions, other than earnings on excess contributions, Putnam is not required to report earnings. Instead Putnam reports the fair market value of your account as of December 31.

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How do I calculate the earnings portion of my gross distribution?

To figure your earnings use the Coverdell ESA - Taxable Withdrawals and Basis Worksheet in Publication 970.

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When must distributions from a Coverdell ESA be completed?

The remaining balance in the account will need to be distributed to the designated beneficiary within 30 days after his/her 30th birthday or it can be rolled over to another Coverdell ESA for the benefit of a family member of the designated beneficiary. There are certain exceptions for special-needs children. Refer to Publication 970 for additional information.

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Are distributions from a Coverdell ESA tax free?

Yes, as long as they are used to pay for qualified educational expenses, do not exceed those expenses, and are made in the same year the expense occurred.

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What is the difference between qualified and nonqualified distributions?

Qualified distributions are used for educational expenses such as tuition, room and board, etc. Nonqualified distributions are distributions that are not being used to cover educational expenses.

Why did I receive a Form 5498 when I have not finished making my contribution for 2015?

For any retirement plan participant who has made a contribution as of 12/31/15, we are including a Form 5498 in your tax package. Should your 2015 contribution total change in any way (for example, you make additional contributions between January 1, 2016 and April 18, 2016), an updated Form 5498 will be mailed to you by May 31, 2016.

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If I did not make any contributions to my retirement plan for 2015 and need to know the fair market value of my investment, where might I find it?

If you did not make any contributions, you may obtain the FMV for each plan type and account from your Annual Statement mailed in early January.

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How do I know what my required minimum distribution (RMD) amount is?

If you are required to take an required minimum distribution in 2016, you will receive a separate RMD statement by January 31, 2016, showing the amount.

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What is the difference between a Traditional IRA and a Roth IRA?

Contributions to a Traditional IRA are generally tax deductible unless certain income limitations are exceeded by the taxpayer. Contributions to a Roth IRA are not tax deductible. However, distributions form a Roth IRA are tax free as long as you meet certain requirements (see Publication 590 for a complete list). Distributions from a Traditional IRA are generally taxed as ordinary income.

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Are my IRA contributions deductible?

Contributions to a Roth IRA are not deductible. Contributions to a Traditional IRA may be deductible depending on your income level, your filing status, and your participation in another tax-sheltered plan.

What information is reported on my form 1099-R?

Form 1099-R reports total and partial distributions from profit-sharing, retirement, and IRA plans.

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Does Putnam determine what portion of my distribution was taxable?

No, Putnam does not make this determination.

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Are dividends and capital gains reported on my form 1099-R?

Only those distrubitions payable to you in cash will be reported on the 1099-R.

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How long do I have to reinvest my retirement funds before I am subject to income taxation on the distribution?

You have 60 days from the time you took the distribution to roll over your retirement funds into another retirement account before you are subject to adverse tax consequences.

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Why did I receive multiple copies of Form 1099-R?

If you had federal and/or state income tax withheld on your account, you will receive additional copies which should be filed with your IRS tax return.

Why was state withholding taken from my redemption?

If you had federal and/or state income tax withheld on your account, you will receive additional copies which should be filed with your IRS tax return.

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Why did I receive multiple copies of Form 1099-R?

Some states require withholding from retirement distributions any time federal withholding is required on those distributions. If state withholding was taken from your redemption, you lived in a state with this requirement.

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Why was state withholding taken from my redemption?

Some states require withholding from retirement distributions any time federal withholding is required on those distributions. If state withholding was taken from your redemption, you lived in a state with this requirement.

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Why does my Form 1099-R show more than one distribution code for my distribution transaction?

Certain distribution transactions require using more than one Distribution Code to accurately identify the type of distribution you received. See the Distribution Code(s) listed for Column 7 on the back of your Form 1099-R to identify payment code descriptions.

What portion of my 529 distribution (withdrawal) is taxable?

Contributions into 529 plans are always after-tax money, so the only amount that could be taxable is the earnings (listed in Column 2). In most circumstances, non-qualified withdrawals will be taxed. Also, in limited circumstances, even qualified withdrawals may be taxed depending on the expense the funds were used for, as well as if any other "tax-free educational benefits" (Coverdell ESAs, Hope/Lifetime Learning Scholarships, etc.) were used. For Ohio residents, most qualified withdrawals will be state tax-free. IRS Publication 970 (available at www.irs.gov) contains formulas that can help you determine the federally taxable portion of the earnings (if one exists). Otherwise, consult your tax advisor for assistance in calculating the state and federal taxable earnings.

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In what situations would information be provided in Column 4?

You, the account owner, will receive a separate Form 1099-Q for all distributions that were a result of an external rollover to another company's qualified 529 plan. In this case, Column 4 will have an 'X' to distinguish these distributions. If you performed an indirect rollover to another 529 plan, Column 4 would not show a 'X'.

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Will I get a tax form for my 529 contributions?

No. Form 1099-Q is for distributions only. It's the only tax form generated for 529 accounts. Contributions are not tax deductible; therefore, no tax forms are generated.

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Who will receive Form 1099-Q — the participant or beneficiary?

The tax form will be sent to either the participant (account owner) or beneficiary depending on the recipient of the distribution. Generally, the beneficiary is listed as the recipient if the distribution is made directly to the beneficiary or to an eligible educational institution for the benefit of the beneficiary. The participant will be listed as the recipient on all other distributions. The participant will receive a separate Form 1099-Q for all rollover distributions sent to another trustee's 529 plan.

When will my Form 1042-S be mailed to me?

Form 1042-s is mailed to eligible shareholders by March 15, 2016.

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Why did I receive a 1099 instead of a 1042-S?

If Putnam does not have a valid Form W-8 on file for all individuals listed on the account, the Internal Revenue Service requires us to treat you as a U.S. customer and charge backup withholding until either a valid W-8BEN form is received or a valid W-9 form is received