Income distributions from certain financial instruments are most likely to experience income reclassification, such as US Real Estate Investment Trusts (US REITs) and US mutual funds. In addition, investments in certain assets, such as commodities and real estate are also more likely to require income reclassification.
This is probably due to the reclassification of income distributions. In certain situations, claims and elections made by the issuer during or after the fiscal year can affect the nature of the income with retroactive effect. As a result, the tax treatment of some or all of the income that was distributed to investors during the year may change.