The meaning and definition of Distribution -
For mutual funds, a distribution is the payment of dividends or realized capital gains to shareholders. Withdrawals from a retirement plan are also known as distributions. Dividends and capital gains may be taxable, unless the mutual fund shares are held in a 401(k) plan or IRA. Withdrawals from retirement plans may be subject to income tax and if made prior to age 59 ½, a 10% IRS penalty may apply.