Advisor Flipbooks

© SEI 2022 For Intermediary Use Only. Do Not Distribute. 6 classified as income, then that portion of the dividend needs to be reclassified as return of capital. This could occur because either the asset paid out an incorrectly estimated dividend amount or the asset did not take in enough revenue to cover the dividend payment. C. What assets usually reclassify? Real Estate Investment Trusts (REITS) reclassify more commonly than any other asset type. Some mutual funds, exchange-traded funds (ETFs), and fixed-income assets reclassify as well. D. Why are ROCR changes necessary? The Emergency Economic Stabilization Act of October 2008 included a requirement for custodians to maintain accurate cost basis as part of their tax-reporting. The ROCR program automates the process of applying the ROCR factors that change the cost basis on affected asset income, and to adjust the gain/loss on any affected sales. E. What will post to the account's transactions? The following is an example of what posts to the account's transactions from ROCR Adjustments. The amount shown in the transaction description will reflect the total change in cost basis; there is no monetary change to the account from these transactions. Note these transactions will post with a trade date in 2022 even though ROCR is performed in 2023. You can also find additional details on the website by clicking on the specific transaction ID's. F. Will ROCR transactions affect the amounts or income rates of the original dividend posting in the system? No. The only changes will be cost-basis updates on the positions and gain/loss updates on affected sales. The Income Re-classification will be reflected on the 1099 DIV. G. When will the ROCR transactions occur? SPTC will run the majority of the ROCR program during the first 2 weeks of February. The timeline is contingent on when asset issuers finalize their ROCR information. These transactions will post with a trade date that is equal to the original dividend posting date.

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