{"url":"https://etfiq.com/learn/return-of-capital","section":"learn","title":"Return of Capital in ETFs: 19a-1 Estimates Explained | ETFIQ","description":"What a Rule 19a-1 return of capital estimate is, why the year-end figure differs, and which option income ETFs write Section 1256 contracts.","as_of":"Oct 21, 2026","structured_data":[{"@type":"DefinedTermSet","@id":"https://etfiq.com/learn/return-of-capital#terms","name":"Return of capital in income ETFs","url":"https://etfiq.com/learn/return-of-capital","hasDefinedTerm":[{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/return-of-capital#rule-19a-1-estimate","url":"https://etfiq.com/learn/return-of-capital#rule-19a-1-estimate","name":"Rule 19a-1 estimate","inDefinedTermSet":"https://etfiq.com/learn/return-of-capital#terms","description":"A fund that pays a distribution from anything other than its net income must say, with the payment, where it estimates the money came from: net income, realized gains or return of capital (Rule 19a-1). ETFIQ prints the issuer\u2019s own estimate, dated, on each income fund page. Income ETFs by return of capital ranks them."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/return-of-capital#year-end-tax-character","url":"https://etfiq.com/learn/return-of-capital#year-end-tax-character","name":"Year-end tax character","inDefinedTermSet":"https://etfiq.com/learn/return-of-capital#terms","description":"The estimate is made before the fund\u2019s tax year closes. Gains and losses later in the year change the split. The annual report and the Form 1099 give the final figure, and it often differs from the estimates."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/return-of-capital#section-1256-contract","url":"https://etfiq.com/learn/return-of-capital#section-1256-contract","name":"Section 1256 contract","inDefinedTermSet":"https://etfiq.com/learn/return-of-capital#terms","description":"An option on a broad stock index, such as the S&P 500 index, is a Section 1256 contract. The fund marks it to market at year end and treats its gain or loss as 60% long term and 40% short term. Options on ETF shares or on one company\u2019s shares are not. IRS Form 6781 sets out the rule."},{"@type":"DefinedTerm","@id":"https://etfiq.com/learn/return-of-capital#return-of-capital-and-erosion","url":"https://etfiq.com/learn/return-of-capital#return-of-capital-and-erosion","name":"Return of capital and erosion","inDefinedTermSet":"https://etfiq.com/learn/return-of-capital#terms","description":"Return of capital says where a payment came from for tax. It does not say whether the fund kept its value. Compare the cash paid with the price change and total return over the same window."}]},{"@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"ETFIQ","item":"https://etfiq.com/"},{"@type":"ListItem","position":2,"name":"Learn","item":"https://etfiq.com/learn/"},{"@type":"ListItem","position":3,"name":"Return of capital in income ETFs","item":"https://etfiq.com/learn/return-of-capital"}]},{"@type":"WebPage","name":"Return of Capital in ETFs: 19a-1 Estimates Explained","description":"What a Rule 19a-1 return of capital estimate is, why the year-end figure differs, and which option income ETFs write Section 1256 contracts.","url":"https://etfiq.com/learn/return-of-capital","dateModified":"2026-10-21","isPartOf":{"@type":"WebSite","name":"ETFIQ","url":"https://etfiq.com"},"speakable":{"@type":"SpeakableSpecification","cssSelector":[".lede"]},"publisher":{"@id":"https://etfiq.com/#org"}}],"characters":2406,"truncated":false,"content":"ETFIQ / Learn / Return of capital in income ETFs \n \n Return of capital in income ETFs\n Of the 376 income ETFs ETFIQ covers, 216 had a latest Rule 19a-1 estimate above 50% return of capital, as of Oct 21, 2026.\n Return of capital is the part of a distribution that is not income or realized gains. It is not taxed when it is paid. It lowers your cost basis instead. Each income fund page shows the estimate beside the price change over the same window.\n Rule 19a-1 estimate A fund that pays a distribution from anything other than its net income must say, with the payment, where it estimates the money came from: net income, realized gains or return of capital ( Rule 19a-1 ). ETFIQ prints the issuer\u2019s own estimate, dated, on each income fund page. Income ETFs by return of capital ranks them. Year-end tax character The estimate is made before the fund\u2019s tax year closes. Gains and losses later in the year change the split. The annual report and the Form 1099 give the final figure, and it often differs from the estimates. Section 1256 contract An option on a broad stock index, such as the S&P 500 index, is a Section 1256 contract. The fund marks it to market at year end and treats its gain or loss as 60% long term and 40% short term. Options on ETF shares or on one company\u2019s shares are not. IRS Form 6781 sets out the rule. Return of capital and erosion Return of capital says where a payment came from for tax. It does not say whether the fund kept its value. Compare the cash paid with the price change and total return over the same window. Where to next\n Reading an income ETF All income ETFs Income ETFs by return of capital How ETFIQ computes these figures What is return of capital? Definitions as ETFIQ uses them for income ETFs. Not tax advice. Standards and sources \n\n Cite this page. ETFIQ, Return of capital in income ETFs, data as of Oct 21, 2026. https://etfiq.com/learn/return-of-capital Free to use with attribution for figures ETFIQ computes; issuer data stays under its owner's terms. The underlying files are at Open data .\n Other forms Plain ETFIQ, Return of capital in income ETFs, data as of Oct 21, 2026. https://etfiq.com/learn/return-of-capital APA ETFIQ. (Oct 21, 2026). Return of capital in income ETFs. Retrieved from https://etfiq.com/learn/return-of-capital Markdown [Return of capital in income ETFs (ETFIQ, Oct 21, 2026)](https://etfiq.com/learn/return-of-capital)","source":"ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.","publisher":{"@id":"https://etfiq.com/#org","name":"ETFIQ","url":"https://etfiq.com"},"license":"https://etfiq.com/license/","license_text":"Figures ETFIQ computes are free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.","citation":"ETFIQ, Return of capital in income ETFs, data as of Oct 21, 2026. https://etfiq.com/learn/return-of-capital"}