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© SEI 2022 For Intermediary Use Only. Do Not Distribute. 16 Throughout the year, mutual funds will buy and sell securities. If the underlying security sales are at a net gain, the fund will pay a Capital Gain Distribution to its holders. This payment is made so the fund's holders realize the gains made by the mutual fund's security sales. Generally mutual funds pay these distributions once a year, and they are most commonly paid in December. These distributions can be long term or short term; the term is based on how long the mutual fund held the underlying asset and not based on how long the investor has held the mutual fund. Capital gain distributions are reported on the 1099-DIV. Short term capital gain distributions are included with all other ordinary dividends and reported in box 1a. Long term capital gain distributions are reported in box 2a. Capital gains and capital gain distributions are not taxable to IRA's. C. What is a Sale of Rights Transaction? A Non-US based Company's can be owned by US investors in the form of American Depository Receipts (ADR's). If the Non-US based company issues stock rights to existing holders to purchase additional shares of the stock, the ADR Trustee may sell the stock rights and pass the sale's proceeds to the ADR shareholders. Such transactions are posted as cash dividends but may be characterized as sale proceeds for tax purposes. These transactions will not have a cost basis on the 1099B. The Taxpayer will need to refer to published tax guidance provided by the Non-US based company around the cost basis reporting and taxability; however, the Non-US based company may not issue tax guidance for ADR holders. D. What does the country RZ indicate? On the 'Foreign Income and Taxes Summary', a country code of RZ indicates that the income was paid by a Regulated Investment Companies (RICs). Per IRS guidance, SPTC does not report a specific country for RIC income, and instead use the placeholder RZ. 11. SEI Private Trust Company's reporting to the IRS A. What information does SPTC, as custodian of my clients' investment accounts, send to the IRS? SPTC only reports the information on Forms 1099-DIV, 1099-INT, 1099-OID, 1099-B, 1099-R, 1099-MISC and Form 5498 to the IRS. SPTC does not send the additional information provided in the Tax Information Statement to the IRS. B. Is tax-exempt interest reported to the IRS? Tax-exempt interest is not taxed by the Federal government. However, tax-exempt interest is still reported to the IRS. Tax-exempt interest needs to be filed by the tax payer on their federal tax return to ascertain eligibility for Alternative Minimum Tax (AMT). Form 1099-INT reports tax exempt interest. Please note that interest that is tax-exempt at the Federal level still may be taxable at a state level. To assist your clients in the preparation of their state tax returns, this information is also provided in the Tax- Exempt section of the Tax Information Statement. Your client should work with their tax preparer on how to report this interest properly. C. For accounts that receive a 'Tax information only' statement, why is some information being reported to the IRS? Per IRS guidance, SPTC will not provide tax reporting on certain accounts, such as a Foundations, Endowments, or C-Corporations. However, your client may have opted to receive a 'Tax information only' statement from SPTC. This will show information similar to a 1099-B, 1099-DIV, 1099-INT, and 1099-OID. This information is generally not transmitted from SPTC to the IRS. However, per IRS guidance, if the account had Foreign Tax Paid, Federal or State withholding, Substitute payments (1099-MISC, box 8), or tax credit interest, then SPTC will report those specific transactions to the IRS.

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