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2021 163(j) Dividends for Corporate Investors

Section 163(j) Deduction

A portion of ordinary dividends received may be eligible to be treated by corporate shareholders as Section 163(j) interest dividends and thus qualify as business interest income when determining the limitation on their business interest expense deduction.

To determine the amount of each dividend you received in calendar year 2021 that is eligible to be treated as business interest income, multiply the ordinary dividend income received by the corresponding Section 163(j) interest dividend percentage provided. 

 

PERCENTAGE TO APPLY TO ORDINARY DIVIDENDS FOR 2021
Mutual Fund Name PERCENTAGE 
Avantis Core Municipal Fixed Income Fund 2.23%
Avantis Short-Term Fixed Income Fund* 100.00%

*The holding period requirements for Section 163(j) interest dividends would not apply to this fund or ETF.

PERCENTAGE TO APPLY TO ORDINARY DIVIDENDS FOR 2021
ETF Name PERCENTAGE 
Avantis Core Municipal Fixed Income ETF1* 2.97%
Avantis Short-Term Fixed Income ETF1 100.00%

Exchange Traded Funds (ETFs) are bought and sold through exchange trading at market price (not NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.

Municipal Securities investing is more sensitive to events that affect municipal markets, including legislative or political changes and the financial condition of the issuers of municipal securities. The fund may have a higher level of risk than funds that invest in a larger universe of securities. Additionally, the novel coronavirus (COVID-19) pandemic has significantly stressed the financial resources of many municipal issuers, which may impair a municipal issuer's ability to meet its financial obligations when due and could adversely impact the value of its bonds, which could negatively impact the performance of the fund.

1 This fund is an actively managed ETF that does not seek to replicate the performance of a specified index. To determine whether to buy or sell a security, the portfolio managers consider, among other things, various fund requirements and standards, along with economic conditions, alternative investments, interest rates and various credit metrics. If the portfolio manager considerations are inaccurate or misapplied, the fund's performance may suffer.IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

Exchange Traded Funds (ETFs): Foreside Fund Services, LLC – Distributor, not affiliated with American Century Investment Services, Inc.