Individual, joint and trust account tax FAQ

No, investments you make into your account on your behalf are not subject to taxes.

If an investment is made into an account by someone other than the account owner(s), the contributor who gave the money may be subject to gift taxes for the amount.

The gift tax is a federal tax on transfers and conveyance of property in the form of a gift between living people. However, the Internal Revenue Service (IRS) does allow certain amounts to be excluded from taxes and reporting. This amount can change annually, and it’s based on the contributor’s filing status.

Consult a tax advisor regarding your specific situation.

No, investments into individual, joint and trust accounts are not reported to the IRS, so a tax form is not generated.

All transactions that occurred on your account during the calendar year are included in your year-end account statement and can be viewed online.

Yes, dividends and capital gains received by these accounts are considered taxable, regardless of whether they are reinvested or taken in a different method, like sent as a check to the account owner. Investors are required to include these amounts on their annual federal and state (if applicable) income tax returns.

Form 1099-DIV reports any dividends and/or capital gains earned under the primary account owner’s Social Security number. Form 1099-DIV is generally available in January. Refer to the tax form schedule.

Form 1099-DIV reports any dividends and/or capital gains earned on an individual, joint or trust account under the primary account owner’s Social Security number. Form 1099-DIV is generally available in January. Refer to the tax form schedule.

Generally, yes. The amount withdrawn from one fund* to move into another fund is considered a sale of shares. Investors are required to include any gains or losses from the sale of shares on their annual federal and state (if applicable) income tax returns.

Form 1099-B reports any sale of shares under the primary account owner’s Social Security number. Form 1099-B is generally available in January. Refer to the tax form schedule.

*Not applicable for shares sold or exchanged from the American Funds U.S. Government Money Market Fund.

Yes, the amount withdrawn from a fund* is considered a sale of shares. Investors are required to include any gains or losses from the sale of shares on their annual federal and state (if applicable) income tax returns.

Form 1099-B reports any sale of shares under the primary account owner’s Social Security number. Form 1099-B is generally available in January. Refer to the tax form schedule.

*Not applicable for shares sold or exchanged from the American Funds U.S. Government Money Market Fund.

Form 1099-B reports any sale of shares from an individual, joint or trust account under the primary account owner’s Social Security number. Form 1099-B is generally available in January. Refer to the tax form schedule.

Log in to your account and go to Statements & Tax Forms to get copies of your tax forms. Click on the applicable tax year to access the desired tax forms. View the tax form schedule to see when the forms are available.

Watch How to view and download statements and tax forms for a tutorial.

Note: Tax forms are not generated if a tax-reportable event did not take place in the tax year.

Yes, as long as you are the owner of both the individual, joint or trust account and the IRA.

If you are the primary owner of both the individual, joint or trust account and the IRA, you can move money online to make an IRA contribution. Access your individual or joint account and click Exchange.

If you are a secondary owner of a joint account, contact us to process the request.

The owner of an individual or joint account can designate transfer on death (TOD) beneficiaries.

To add a beneficiary to an existing account, complete the Transfer on Death (TOD) Registration Request (PDF).

Once established on an account, TOD designations can be updated online.

While there is no limit on how much can be invested into an individual, joint or trust account, there are limits for certain transactions:

  • For investments from a linked bank account via Automated Clearing House (ACH) into an account at Capital Group, the maximum amount is $100,000 per investor, per day, across all accounts

  • For investments into Class C shares of American Funds, there is a $500,000 maximum investment

  • The automatic investment plan minimum is $50 per transaction

  • To open a new fund in an existing account, the fund minimum provided in the fund’s prospectus must be met. For most funds, the minimum initial investment is $250 or $1,000 for money market and certain tax-exempt funds.

 

Both account types allow 2 or more individuals to be listed in the account registration, and tax reporting occurs under the first owner’s Social Security or tax identification number.

  • The owners of a JTWROS account own equal but undivided interest in the account. Upon an owner’s passing, the remaining owners own the full account’s interest, without the requirement of probate. JTWROS accounts may designate a TOD beneficiary to take ownership upon the passing of all account owners.

  • The owners of a tenants in common account can own unequal percentages of the account, which may appear in the account’s registration. Upon an owner’s passing, their portion of the account is passed to their estate and may be subject to probate.
     

Note: Some states limit the joint account registrations available to their residents. Consult a tax advisor or financial professional for information regarding your specific situation.

Yes. As long as it is within 90 days of the receipt of the money, you can reinvest all or part of a withdrawal back into the same account without a sales charge. For more information on the right of reinvestment policy, review Share class and sales charge FAQ.

Note: The sale of shares from individual and joint accounts may be subject to federal and state (if applicable) income taxes. Consult a tax advisor or financial professional for information regarding your specific situation.

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