Illustrated Explanation of an Informational Tax Statement

Informational tax reporting statement

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• Dividends and Distributions
  

  Lists all taxable dividends, long-term capital gain distributions, and nondividend distributions earned in your account as well as foreign tax paid. This may include dividends and/or distributions from the mutual fund you use as your core money market fund. Please note, this year we will begin reporting tax-exempt interest dividend and private activity bond interest dividend amounts (mainly from mutual funds or other regulated investment companies) on lines 10 and 11 of this form. Specified private activity bond interest must be taken into account in computing the federal alternative minimum tax (AMT). The tax-exempt interest reported on line 10 includes these specified private activity bond interest dividends, if any. For more information, see the IRS Instructions for Form 4626, Alternative Minimum Tax-Corporations (PDF). In prior years, following IRS regulations governing reporting for non-exempt accounts, Fidelity reported this information on lines 8 and 9 of the Interest Income section of your statement. Those lines in the Interest section will now primarily report tax-exempt interest from individual bonds and not from mutual funds.

  As the following discussion explains, the dividend amounts that we report may be higher than the amounts that you actually received. If foreign tax was paid, the amount that you may be able to claim as a deduction or credit is reported in line 6 of the Dividends and Distributions section, and that amount is also included in the dividend amount reported in line 1a and, if applicable, line 1b. For this reason, the total dividends reported on the form may be higher than the amount that you actually received. We report all dividends in U. S. dollars (USD). If the dividends that you received were paid in a currency other than USD, we convert the foreign currency dividends into USD and report the USD equivalent in the Dividends and Distributions section. For additional 2012 foreign tax credit pass-through information for Fidelity mutual funds, in early February you will be able to see the Important Information for Corporate Investors about Foreign Tax Paid letter on the Fidelity Fund-Specific Tax Information page in Fidelity's Tax Center.

  Due to IRS reporting requirements governing widely held fixed investment trusts, if you owned certain HOLDRS trusts, Fidelity reports investment expenses on line 5. We also include those expenses in the dividends reported in line 1a, because, for the normal tax reporting which we are mimicking here, we are required to report such trust dividends including expenses. For this reason, the total dividends reported on the form may be higher than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations. For more information, see IRS Publication 550, Investment Income and Expenses (PDF). Opens in a new window., or consult your tax advisor.

  We report all dividends in U.S. dollars (USD). If the dividends that you received were paid in a currency other than USD, we convert the foreign currency dividends into USD and report the USD-equivalent in the Dividends and Distributions section of the tax statement.

• Interest Income
  

  Lists all interest earned on government and corporate debt obligations and short-term certificates of deposit, as well as interest earned from cash in your account.

  Line 8 reports tax-exempt interest from individual securities, but not from mutual funds or other regulated investment companies. We now report those tax-exempt interest dividends in the Dividends and Distributions section, as described above.

  Line 9 reports any applicable specified private activity bond interest. Specified private activity bond interest must be taken into account in computing the federal alternative minimum tax (AMT). The tax–exempt interest reported on line 8 includes this specified private activity bond interest, if any. For more information, see the IRS Instructions for Form 4626, Alternative Minimum Tax—Corporations (PDF). Opens in a new window..

  Line 10 shows the CUSIP number for the tax-exempt security on which tax-exempt interest was paid to you during the calendar year and reported on line 8. In cases in which we are reporting tax-exempt interest from more than one CUSIP, the line is marked, "various."

  We report all interest in United States dollars (USD). If the interest that you received was paid in a currency other than USD, we convert the foreign currency interest into USD and report the USD-equivalent.

• Miscellaneous Income
  

  Lists other reportable income, such as royalty payments from grantor trusts or from timber, coal, or iron ore. Even if you are an exempt recipient for 1099 tax reporting purposes, certain types of income are still required to be reported on an official tax form to both you and the IRS. For example, if you received a substitute payment in lieu of dividends or tax-exempt interest, we are required to report it to you and the IRS on line 8 of Form 1099-MISC. You would receive that Form 1099-MISC separately from your Informational Tax Reporting Statement. Beginning with tax year 2012, you will find this information on both your Informational Tax Reporting Statement and your 1099 Tax Statement.

  Due to IRS reporting requirements governing widely held fixed investment trusts, if you owned certain royalty or HOLDRS trusts, Fidelity reports various expenses, as well as adjustments which affect the estimated cost basis of your shares, in the applicable supplemental sections of your informational tax statement. We also include your pro-rated share of those expenses in the royalties line (line 2), because we are required to report your royalties before expenses were subtracted (of course, we do not report any of the data in this informational statement to the IRS). For this reason, the royalties reported on the form may be greater than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations. In addition, by March 15, we will mail royalty trust share holders a supplemental booklet with information relayed to us by the trust. For more information, see IRS Publication 550, Investment Income and Expenses (PDF). Opens in a new window., or consult your tax advisor.

• Summary of Proceeds from Broker and Barter Exchange Transactions
  

  Lists gross proceeds less commissions from sales.

• Proceeds from Broker and Barter Exchange Transactions
  

  As part of our efforts to continue to comply with the IRS cost basis reporting requirements for non-exempt accounts, Fidelity has also enhanced the design and content of the Proceeds from Broker and Barter Exchange Transactions section in the Informational Tax Reporting Statement. As a result, we now separate your proceeds information into up to three subsections (if applicable): Short-Term Transactions, Long-Term Transactions, and Transactions for Which Term is Unknown.

  Much of your cost basis information for redemptions, sales, etc. is likely to appear in one of these sections. However, some cost basis information still appears, if applicable, in the Realized Gain/Loss sections of your statement. Here is a summary of where you will find transaction information for various kinds of securities.

  Type of security	Location of cost basis information in your tax statement
  Equities Mutual funds and other securities in dividend reinvestment plans Fixed-income securities without adjustments Short sales opened in 2011 or 2012, and closed during 2012	Proceeds from Broker and Barter Exchange Transactions section only
  Foreign equities Foreign fixed-income securities Domestic fixed-income securities with cost basis adjustments	Proceeds from Broker and Barter Exchange Transactions section. Additional information is also provided in the Realized Gain/Loss sections of the Detail pages
  Options Short sales, opened prior to 2011 and closed in 2012 Foreign currency transactions	Detail Realized Gain/Loss sections only

  The Proceeds from Broker and Barter Exchange Transactions section lists all proceeds from the sale or other disposition of stocks, bonds, and mutual funds; subscription rights expiring with a cash equivalent, taxable tenders and mergers; and short sales if opened no earlier than 2011 and closed in 2012. We report all transactions on a trade–date basis and they are the net amount after commissions. The cost basis reported reflects certain adjustments, if applicable. You may be required to make additional adjustments to properly calculate your taxable gain/loss. If you are required to file a federal tax return, you may be required to make additional adjustments to properly calculate your taxable gain/loss.

  Mutual funds and other securities in dividend reinvestment plans (DRIPs)—bifurcation of information

  Fidelity follows IRS rules for calculating average cost basis for mutual funds and other securities in certain DRIPs. Due to the implementation of cost basis reporting regulations for non-exempt accounts for 2012, Fidelity is separately tracking average cost for "covered" and "noncovered" mutual fund and DRIP securities. Positions, using the average cost calculation method, that include both noncovered and covered shares are considered bifurcated. As such, these positions comprise the following:

  • Shares acquired prior to January 1, 2012
  • Additional share purchases that occur on or after January 1, 2012, of the same mutual fund

  For mutual fund positions that are considered bifurcated

  • The average cost basis for covered and noncovered lots is calculated separately.

  Reporting short sales. For tax years 2011 and beyond, new IRS rules require us to report all short sales in the year in which the short sale is closed. Before tax year 2011, we reported short sales in the Proceeds from Broker and Barter Exchange Transactions section when they were opened. Short sales opened prior to 2011 and closed in 2012 are an exception to this rule. Those transactions are reported instead in the detail Realized Gain/Loss sections of your tax statement. In this way for reportable accounts, we will avoid reporting the same short sale twice to the IRS. The IRS generally requires shareholders to report all short sales in the year that the short sale is closed. This is not a change from prior years.

  Transactions using foreign currency. In this section we report all proceeds in U.S. dollars (USD). If the proceeds that you received from a transaction were paid in a currency other than USD, we convert those foreign currency proceeds into USD based on exchange rates on the trade date of the transaction and report those USD-equivalent proceeds. If you have made such transactions, we provide additional information in the footnotes attached to the Realized Gain/Loss sections of the detail information pages of this statement.

  * Fidelity will report gross proceeds, as well as certain cost basis and holding period information, to you and to the IRS on Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for tax reporting purposes. However, other than S-Corporation accounts, accounts receiving an Informational Tax Reporting Statement are categorized as exempt from IRS reporting. Account holders should verify Fidelity-provided cost basis and holding period information in the Proceeds from Broker Transactions and/or the Realized Gain/Loss sections of their Informational Tax Reporting Statements when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

Detail Information

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• Details of Dividends and Distributions Transactions

  We present Dividends and Distributions details in three subsections: Total Ordinary Dividends and Distributions Detail; Total Capital Gains Distributions Detail; and Other Distributions, Tax, and Expense Detail. Each of these subsections appear only if they apply to the transactions reported in the Dividends and Distributions section on the first page of your statement.

  

  We identify the short-term capital gain distributions portion of ordinary dividend distributions in this section. Generally, short-term capital gain distributions are nonqualified dividends, and as such, are taxed as ordinary income. However, a portion of the short-term capital gain distribution may be a qualified dividend and subject to one of the lower federal long-term capital gain tax rates. Any portion of the short-term capital gain distribution that is potentially subject to one of the lower tax rates is included as qualified dividends in line 1b.

  A portion of line 1a may be eligible for the deduction for dividends received from domestic corporations under Internal Revenue Code Section 243. If you received a dividend from a Fidelity mutual fund which may qualify for the corporate deduction for dividends received, in mid-February you will be able to see the Percentage of Dividends Received which May Qualify for a Deduction letter on the Fidelity Fund-Specific Tax Information page in Fidelity's Tax Center. This letter identifies the percentage of each dividend distribution from a Fidelity mutual fund reported in line 1a that is attributable to dividends received by the fund from domestic corporations and which may qualify for the corporate deduction for dividends received.

  Tax-exempt interest dividend details are also listed in this section, transaction by transaction. As we stated at the beginning of this guide, the 2012 Dividends and Distributions section now provides tax-exempt interest dividend and specified private activity bond interest dividend amounts (mainly from mutual funds or other regulated investment companies) on lines 10 and 11. Since we have reported tax-exempt interest dividend amounts in prior years in the Interest Income section, only the placement of this dividend information is new.

  If we report foreign tax on line 6, then that amount is also included in the dividends reported on line 1a and, if applicable, Line 1b. For mutual funds, you will see such individual foreign tax entries (Line 6) as part or all of certain matching individual entries for lines 1a and 1b. For individual securities we do not give such a payment-by-payment accounting. If a foreign tax was paid, the amount that you may be able to claim as a deduction or credit is reported in line 6. For additional 2012 foreign tax credit pass-through information for Fidelity mutual funds, see the Important Information for Corporations about Foreign Tax Paid letter on the Fidelity Fund-Specific Tax Information page.

  

  Total Capital Gain Distributions (2a) may include, if applicable, Unrecaptured Section 1250 Gain (2b), Section 1202 (28%) Gain (2c), and Gains from Collectibles (28%) (2d). The portion of Capital Gain Distributions subject to 15% Rate Gain is equal to (2a) less amounts shown in columns (2b) through (2d). We have added a separate column, listing these 15% rate gain details to the 2012 Total Capital Gains Distributions Detail section.

  

  The amount of any non-dividend distributions (line 3) you receive will generally reduce your basis for the applicable security by the same amount. If you owned certain HOLDRS trusts, Fidelity reports the investment expense details for expenses reported on line 5. Due to IRS reporting requirements governing widely held fixed investment trusts, we also include those expenses in the dividends that we report. For this reason, the total reported gross dividends may be higher than the amount that you actually received. Investment expenses are generally deductible, subject to applicable limitations.

  We report all dividends in U.S. dollars (USD). If the dividends that you received were paid in a currency other than USD, we convert the foreign currency dividends into USD and report the USD equivalent in the Details of Dividends and Distributions Transactions.

• Details of Interest Income Transactions

  We present Interest Income details in two subsections: Interest Income Details Including Corporate and Tax-Exempt Obligations; and Other Interest Details, Including U.S. Government Securities. These individual subsections appear only if they apply to the amounts reported in your Interest Income section on the first page of your statement.

  

  We show Interest Income (1) (a combination of Interest Payments received, Accrued Interest received on the Sale of Bonds, and OID Paid to you on Short-Term Instruments) as well as Tax-Exempt Interest (8), Specified Private Activity Bond Interest (9), and Foreign Tax Paid (6) details in this subsection. Any Specified Private Activity Bond Interest (9) amounts are also included in the Tax-Exempt Interest (8) column. Generally Specified Private Activity Bond Interest must be included in the calculation of Alternative Minimum Tax (AMT).

  

  We show Interest on U.S. Savings Bonds and Treasury Obligations (3) (a combination of Interest Payments on Treasury Bonds and Notes, Accrued Interest you received on the Sale of Treasury Instruments, and U.S. T-Bill Interest you received) in this subsection.

• Miscellaneous Income Details
  

  This section lists any royalty or HOLDRS trust income earned in your account. Due to IRS reporting requirements governing widely held fixed investment trusts, if you owned certain royalty or HOLDRS trusts, Fidelity reports various expenses, as well as adjustments which affect the estimated cost basis of your shares, in the applicable detail information sections of your informational tax statement. We also include your pro-rated share of those expenses in the Royalties line (line 2), because we report your royalties before expenses were subtracted. For this reason, the royalties reported on the statement may be greater than the amount that you actually received. Investment expenses may be deductible, subject to applicable limitations.

  In addition, by March 15, we will mail royalty trust share holders supplemental information relayed to us by the trust.

  For more information, see IRS Publication 550, Investment Income and Expenses (PDF). Opens in a new window., or consult your tax advisor.

• Short-Term Realized Gain/Loss
  

  Due to new IRS cost basis reporting rules, certain aspects of Fidelity's cost basis reporting* changed, beginning with tax year 2011. See the introductory portion of this guide for further information.

  Here is a summary of where you will find transaction information for various kinds of securities.

  Type of security	Location of cost basis information in your tax statement
  Equities Mutual funds and other securities in dividend reinvestment plans Fixed-income securities without adjustments Short sales opened in 2011 or 2012, and closed during 2012	Proceeds from Broker and Barter Exchange Transactions section only
  Foreign equities Foreign fixed-income securities Domestic fixed-income securities with cost basis adjustments	Proceeds from Broker and Barter Exchange Transactions section. Additional information is also provided in the Realized Gain/Loss sections of the Detail pages
  Options Short sales, opened prior to 2011 and closed in 2012 Foreign currency transactions	Detail Realized Gain/Loss sections only

  If you purchased a security in a foreign currency, then following its sale or disposition, this section provides both the cost in that currency and the estimated U.S. dollar (USD) cost basis in the "Cost Basis" column (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase). If you sold a security in a foreign currency, this section provides both the foreign currency proceeds and the USD-equivalent of those foreign currency proceeds (as of the trade date of the sale) in the Proceeds column. See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

  Note that if you sold or otherwise disposed of a debt instrument that is denominated in a currency other than USD or that makes a payment calculated by reference to the value of a currency other than USD, certain tax rules may require you to treat as ordinary income/loss all or a portion of your realized gain/loss. Consult your tax advisor for more information regarding reporting of transactions made in a foreign currency.

  Extraordinary dividend—In general, an extraordinary dividend is a dividend which exceeds 10% of your tax basis in your stock. If you received a dividend deemed as an extraordinary dividend on stock held in your account, subsequent losses realized on the sale of such stock may be treated as long-term capital losses to the extent of the extraordinary dividend regardless of how long you held the stock. If you believe you received an extraordinary dividend, you may want to consult with your tax advisor or see IRS Publication 550, Investment Income and Expenses (PDF). Opens in a new window.,

  * Fidelity will report gross proceeds, as well as certain cost basis and holding period information, to you and to the IRS on Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for tax reporting purposes. However, accounts receiving an Informational Tax Reporting Statement are categorized as exempt from IRS reporting. Account holders should verify Fidelity-provided cost basis and holding period information in the Proceeds from Broker Transactions and/or the Realized Gain/Loss sections of their Informational Tax Reporting Statement when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• Long-Term Realized Gain/Loss
  

  Due to new IRS cost basis reporting rules, certain aspects of Fidelity's cost basis reporting* changed, beginning with tax year 2011. See the introductory portion of this guide for further information.

  Here is a summary of where you will find transaction information for various kinds of securities.

  Type of security	Location of cost basis information in your tax statement
  Equities Mutual funds and other securities in dividend reinvestment plans Fixed-income securities without adjustments Short sales opened in 2011 or 2012, and closed during 2012	Proceeds from Broker and Barter Exchange Transactions section only
  Foreign equities Foreign fixed-income securities Domestic fixed-income securities with cost basis adjustments	Proceeds from Broker and Barter Exchange Transactions section. Additional information is also provided in the Realized Gain/Loss sections of the Detail pages
  Options Short sales, opened prior to 2011 and closed in 2012 Foreign currency transactions	Detail Realized Gain/Loss sections only

  If you purchased a security in a foreign currency, then following its sale or disposition, this section provides both the cost in that currency and the estimated U.S. dollar (USD) cost basis in the Cost Basis column (determined based on the USD equivalent of the foreign currency cost as of the trade date of purchase). If you sold a security in a foreign currency, this section provides both the foreign currency proceeds and the USD equivalent of those foreign currency proceeds (as of the trade date of the sale) in the Proceeds column. See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

  Note that if you sold or otherwise disposed of a debt instrument that is denominated in a currency other than USD or that makes a payment calculated by reference to the value of a currency other than USD, certain tax rules may require you to treat as ordinary income/loss all or a portion of your realized gain/loss.

  Consult your tax advisor for more information regarding reporting of transactions made in a foreign currency.

  Extraordinary dividends—In general, an extraordinary dividend is a dividend which exceeds 10% of your tax basis in your stock. If you received a dividend deemed as an extraordinary dividend on stock held in your account, subsequent losses realized on the sale of such stock may be treated as long-term capital losses to the extent of the extraordinary dividend regardless of how long you held the stock. If you believe you received an extraordinary dividend, you may want to consult with your tax advisor or see IRS Publication 550, Investment Income and Expenses (PDF). Opens in a new window.

  * Fidelity will report gross proceeds, as well as certain cost basis and holding period information, to you and to the IRS on Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for tax reporting purposes. However, accounts receiving an Informational Tax Statement are categorized as exempt from IRS reporting. Account holders should verify Fidelity-provided cost basis and holding period information in the Proceeds from Broker Transactions and/or the Realized Gain/Loss sections of their Informational Tax Statements when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• Currency Realized Gain/Loss
  

  This section of your statement provides information regarding certain transactions in which a customer disposes of foreign currency, namely exchanges of foreign currency for U.S. dollars (USD), exchanges of foreign currency for a security, and exchanges of foreign currency for a different foreign currency. It provides estimated cost basis*, proceeds, and gain/loss information for the currency disposed of in any of the foregoing transactions. Under certain tax rules, gain/loss realized on these types of transactions may be treated as ordinary income/loss.

  If you originally acquired the foreign currency in exchange for USD, then the estimated cost basis we provided in this section is generally that USD purchase price. If you originally acquired the foreign currency in exchange for another foreign currency, then we determined the estimated cost basis by converting the foreign currency purchase price into USD based on exchange rates on the trade date of the purchase. If you originally acquired the foreign currency in another type of taxable transaction (e.g., as proceeds from the sale of the security or as a dividend), then we determined the estimated cost basis by converting the foreign currency into USD based on exchange rates on the date of that earlier transaction.

  If you sold the currency in exchange for USD, then the proceeds in this section are those USD proceeds. If you used the foreign currency to purchase a security or another foreign currency, then we determined the proceeds by converting the disposed currency into USD based on exchange rates on the trade date of that transaction.

  See the footnotes on this section of your statement for additional information about our calculations of USD proceeds and USD cost basis in connection with these types of transactions.

  * Fidelity will report gross proceeds, as well as certain cost basis and holding period information, to you and to the IRS on Form 1099-B as required or allowed by law, but such information may not reflect adjustments required for tax reporting purposes. However, accounts receiving an Informational Tax Statement are categorized as exempt from IRS reporting. Account holders should verify Fidelity-provided cost basis and holding period information in the Proceeds from Broker Transactions and/or the Realized Gain/Loss sections of their Informational Tax Statements when calculating reportable gain or loss. Fidelity specifically disclaims any liability arising out of a customer's use of, or any tax position taken in reliance upon, such information. Unless otherwise specified, Fidelity determines cost basis at the time of sale based on the average cost method for open-end mutual funds and based on the first-in, first-out (FIFO) method for all other securities. Consult your tax advisor for further information.

• Tax–Exempt Income from Fidelity Funds
  

  This section lists exempt interest dividends from Fidelity municipal funds declared during 2012, and the amounts of those interest dividends that are attributable to in-state obligations and to out-of-state obligations. State tax rules for corporations may render some of these amounts inappropriate for use by corporations. Consult your tax advisor for more details.

• Account Fees
  

  This section lists the fees paid in 2012 from your account. We have listed these fees with the same descriptions that we used in your monthly/quarterly statements. Any fee amounts preceded by a minus sign indicate a fee reversal which we made in your account (including ATM fee rebates you received in your Fidelity^® Cash Management Account).

• Accrued Interest Paid on Purchases
  

  This section lists accrued interest paid on purchases of bonds. Accrued interest paid when a bond purchase settles is not taxable to the buyer; instead, it is income that is taxable to the seller. Your Interest Income section reports the full interest payment credited to your account, including accrued interest.

• Actual Payment Shortfall
  

  Due to IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of the actual payment shortfall incurred by your royalty trust and/or HOLDR's trust. Actual Payment Shortfall is the difference between the actual contingent payment and the projected contingent payment from Contingent Payment Debt Instruments. See your tax advisor for more information.

• Addition to Basis
  

  Due to IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of addition to basis incurred by your royalty trust and/or your HOLDR's trust. When the amount of principal reported exceeds the amount distributed to you, the difference is generally added to your cost basis.

• Administrative Expense
  

  Due to the IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of administrative expense incurred by your royalty trust and/or your HOLDRs trust. These expenses have not been deducted from the gross royalty income reported in the Dividends and Distributions and/or the Miscellaneous Income sections of your statement. These expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.

• Generic Expenses Subject to 2% Adjusted Gross Income (AGI) Limitation
  

  Due to IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of generic expenses subject to the 2% AGI limitation incurred by your royalty trust and/or HOLDRs trust. These expenses are included in the gross royalty income reported in the Dividends and Distributions and/or the Miscellaneous Income sections of your statement.

• Generic Expenses Not Subject to 2% Adjusted Gross Income (AGI) Limitation
  

  Due to IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of generic expenses not subject to the 2% AGI Limitation incurred by your royalty trust and/or HOLDR's trust. These expenses are included in the gross income reported in the Dividends and Distributions and/or the Miscellaneous Income sections of your statement.

• Margin Interest Paid
  

  This section lists margin interest paid by the account each month.

• Severance Tax
  

  Due to IRS reporting requirements for widely held fixed investment trusts, this section reports your prorated share of severance tax paid by your royalty trust and/or your HOLDRs trust. Severance taxes are commonly imposed by states on the extraction of natural resources to be used out of state. These expenses have not been deducted from the gross royalty income reported in the Dividends and Distributions and/or the Miscellaneous Income sections of your statement. These expenses may be deductible, subject to applicable limitations. See your tax advisor for more information.