if the security was held by a tax-deferred retirement a/c like a 401k or IRA (there are others) you should not have gotten a 1099-Div.
if it is your SSN and name that's on the 1099 but the security is held in a tax-deferred a/c, then something is messed up. you would need to contact the company holding the a/c.
if it was not held in a tax-deferred a/c then:
in effect, the tax laws treat it as if you got the cash and then used the cash to buy more of the same security so it is taxable. the fact that the security declined in value is irrelevant. you would need to sell it to take the loss. however, the deduction for net capital losses can't exceed $3,000 per year.
