You need to go to the Investment section. The last screen of the 1099-DIV states:
"We'll handle your cash liquidation distributions from this payer later"
"Just remember to go to the Investment Income section under Income & Expenses"
When a corporation, bank, or credit union undergoes a partial or complete liquidation, you may get a liquidation distribution. Oftentimes, this distribution is not taxable; instead, it reduces the basis of any stock you own.
However, in the following cases, the distribution is taxable, which means you'll need to report it as a liquidation sale when you report your investment income:
- Your cost basis in the stock is zero or less than the distribution amount; or
- This liquidation is a final distribution from the company.
If the liquidation results in the cancellation of stock, and the total distribution ends up being less than your basis, you can claim a loss in the year the final distribution is received.
When you sell the stock, your cost basis will be reduced by any distributions you received.
