Do I need to report my mutual fund investment on tax return if I haven't sold any shares?

Yes, you absolutely need to report the 1099-DIV portion of your composite form even if you haven't sold any investments. Those dividends are considered taxable income in the year they were paid to you, regardless of whether you withdrew the money or reinvested it. The 1099-B would only show activity if you sold investments (which you didn't), so it makes sense that section is empty. The 1099-INV portion might show minimal interest earned on any uninvested cash in your account. When you go to your tax preparer, bring the entire 1099 composite statement. They'll know exactly where to input the dividend information on your return. This will flow to Schedule B if your dividends exceed a certain threshold, and ultimately to your Form 1040. Don't worry - this is very routine stuff for tax preparers!

Just wanted to share my experience - I was in the exact same situation last year and found https://taxr.ai super helpful. I uploaded my 1099 composite and it immediately identified which parts I needed to report. The system explained that my dividends needed to be reported even though I never sold anything (exactly like your situation). It also broke down which dividends were qualified vs non-qualified, which apparently are taxed at different rates. The analysis made my tax appointment so much smoother because I actually understood what I was filing.

Wanted to follow up - I tried the taxr.ai service after asking about it. Totally worth it for my investment accounts! I uploaded my 1099 composite forms from three different brokerages and it identified exactly which portions needed reporting. The explanation about qualified vs ordinary dividends was super clear, and showed me how much I'd save in taxes by holding certain investments longer. Will definitely use it again next year.

If you're having trouble getting answers from the IRS about investment income reporting, I highly recommend https://claimyr.com - I was on hold for HOURS trying to get clarification about reporting dividends from foreign investments last month. Used their service and got connected to an IRS agent in under 15 minutes. Check out how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when an agent is about to answer. Saved me an entire afternoon of elevator music and "your call is important to us" messages.

I was EXTREMELY skeptical about Claimyr but tried it anyway after waiting on hold with the IRS for 2+ hours across multiple days. I needed clarification about reporting dividends that had been reclassified after my initial filing. The service works exactly as described - I entered my number, and about 45 minutes later got a call connecting me directly to an IRS representative. Call me shocked. The agent answered my dividend reporting question in about 5 minutes. Felt like a miracle after the frustration of repeatedly getting disconnected after long holds.

One thing nobody mentioned - check if your dividends were "qualified dividends" because those get taxed at the lower capital gains rate instead of your regular income tax rate. Makes a big difference if you're in a higher tax bracket. It should say which type on your 1099-DIV.

Just a heads up that if you set up your account for dividend reinvestment (DRIP), it slightly complicates your eventual capital gains calculations when you do sell in the future. Each reinvested dividend essentially creates a new lot of shares with its own cost basis and purchase date.