Taxes

Please Note: If these dates fall on a Saturday, Sunday or legal holiday, the postmark date will be the next business day.

Electronic Delivery: Go Green - You may now elect to receive your tax statement online. To make this election, log into your account and go to the My Accounts tab, click My Information and Preferences from the left navigation, then select Account Preferences.

Non reportable Transactions: for your convenience, the details are listed under the supplemental portion of the 1099 Statement. Non-reportable transactions will not generate a tax statement please refer to your monthly statements.

a. Options: Option (call/put) transactions are not 1099-reportable until tax year 2013,

b. Dividend Claims: Dividend claims are non reportable;

c. MLP Income: Income from a Master Limited Partnership is reported on a K-1. The Sales proceeds will report on the 1099B

Non Mortgage Widely Held Fixed Investment Trust (NMWHFIT) securities, such as grantor trust-type unit investment trusts (UITs), royalty trusts and commodity trusts will receive supplemental written tax information on the Composite 1099, by March 15, 2012 in accordance with IRS regulations concerning WHFIT reporting. Please refer to page three of the 2010 IRS General Instructions for Forms 1099, 1098, 3921, 3922, 5498, and W-2G for further information.

Widely Held Mortgage Trust (WHMT) Securities: In accordance with IRS regulations concerning WHFIT reporting, securities such as mortgage pools, multi-class mortgage backed security (MBS) pass-through trusts and real estate mortgage investment conduits (REMICs) will receive a separate `Widely Held Mortgage Trust (WHMT) statement' by March 15, 2012. Holders of these securities will be sent a composite tax statement by Feb. 15, 2011, which includes a disclaimer that the subsequent March 15 document will follow. Please consider this fact before filing your individual tax return prior to March 15.

Revised 1099s: Please consider the following facts before filing your return early. It is common for some securities, such as, mutual funds and REITs to report final tax information until well after the IRS February 15^th mail date. This is because such entities are not required to determine final taxability of distributions until sixty days after the end of their fiscal year, which may be later than February 15^th. When updated tax information becomes available from the fund, Scottrade is required to send affected customers a revised 1099. The activity detail portion of the revised document will denote with a C any change(s) to taxability.

Spillover Dividends: For Regulated Investment Company (RIC) and Real Estate Investment Trust (REIT) dividends that declared with a record date in October, November or December of 2011 but not payable until January of 2012, Scottrade is required by law to report the dividend the year it goes record. Refer to the 2011 IRS Instructions for Form 1099-DIV for more detail.

American Depository Receipt (ADR) : American Depository Receipts represent ownership of underlying foreign stock. The agent sells the ineligible rights on a `best-effort' basis and distributes the sales proceeds to ADR holders The Distributions paid to your Scottrade account will represent the sale of rights proceeds on foreign rights offerings not open to U.S. investors. These proceeds are reportable as a sale on a 1099-B.

Corporation Accounts: The IRS requires the reporting on aggregate substitute payments in-lieu of dividends of $10.00 or more paid to corporations classified as a C-Corp. The income is reported in Box 8 on a 1099-MISC. Otherwise, the firm is not required to issue composite 1099s for C-Corps; they are exempt from 1099 reporting. Please refer to your monthly and/or annual statement (mailed approximately the second week of January).

Nondividend Distributions (Return on Capital) : Per IRS Form 1099-DIV, Instructions for Recipients: Box 3 shows the portion of the distribution that is nontaxable, because it is a return of your cost (or other basis). See Pub. 550, Investment Income and Expenses.

Optional Dividends: The full cash dividend amount paid must be reported on a 1099-DIV; any subsequent stock purchase activity as a result of an optional dividend does not affect the amount required to be reported. Much like a dividend reinvestment, the IRS requires that the full cash dividend initially paid to the account, prior to any stock adjustment, be reported.

Master Limited Partnership (MLP) Income: Investors can expect to receive K-1 information from the general partnership at any time, depending on when the partnership finalizes its tax return. Scottrade has no control over the timing/content of K-1 forms.

Short Sales: Short Sale activity is reportable in the year the short sale is closed. Therefore, if your short sale is not closed as of December 31, 2011, it will not be reported on your 2011 1099B.

Substitute Payments in-Lieu of Dividends: Payments received in-lieu of dividends (substitute payments) on loaned-out margin shares are not qualified dividends. Such cash payments lose the tax characteristics of the dividend and are reportable in Box 8 on a 1099-MISC.

Certificates of Deposit (CDs) on a 1099-B: Scottrade offers certificates of deposit (CDs) that may be traded on a secondary market (`brokered' CDs). Sales are reported on a 1099-B, as are CDs upon redemption --if they matured more than one year after issuance. The redemption of CDs that mature one year or less from issue is not a reportable event.

Canadian Mutual Fund Trusts & Return of Capital: Canadian mutual fund trusts often publish information detailing the reallocation of the year's dividends into return of capital. This reallocation information is usually for Canadian investors only. If the trust does not specifically issue return of capital information explicitly for U.S. investors, the income will be reportable as a dividend. Reallocation information for U.S. investors is usually not available until mid- to late March of the following year. If income is reallocated for U.S. investors, Scottrade will issue a revised 1099.

Original Issue Discount (OID): A long-term debt instrument generally has original issue discount (OID) when it is issued for a price less than its stated redemption price at maturity. Scottrade is required to report an investor's full OID amount on a 1099-OID, however a debt instrument purchased at another firm may have an acquisition premium or market discount. If so, the OID reported to you on Form 1099-OID may have to be adjusted'. For additional information, consult your outside tax advisor or IRS Publication 1212: Guide to Original Issue Discount (OID Instruments).

Who Do I Contact With 1099 Questions or Requests? Please contact your local Scottrade branch office for further assistance. The branch phone number is conveniently located on the first page of your 1099. Please keep in mind that Scottrade does not provide tax advice; consult your professional tax advisor for assistance, or visit www.irs.gov.