Quote:
Originally Posted by Caymus
Do you know if the income is treated as interest or ordinary/qualified dividends?
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VFMXX is a money market fund that generates interest or ordinary dividend income, and maintains a stable one dollar per share asset value. Vanguard does not distribute any qualified dividends from the VFMXX fund. All income is taxed at your ordinary income tax rate. Vanguard reports the income to you on a 1099-DIV form, even though some of the income is actually considered interest income. So in that respect, the terms "interest" and "ordinary dividends" basically mean the same thing.