Yes, the transaction involving Altaba Inc. Escrow probably needs to be reported. Based on the Investor FAQs for Altaba, it appears that the Altaba Fund is liquidating as a result of various legal proceedings. Those Investor FAQs provide the following information about the liquidation and dissolution, and further what these events mean from a tax perspective.
In general, distributions made pursuant to the Plan of Complete Liquidation and Dissolution, including the pre-dissolution liquidating distribution, will be treated for U.S. federal income tax purposes as a series of distributions in complete liquidation of Altaba in which amounts received by stockholders are treated as full payment in exchange for their shares of Altaba common stock.
A liquidating distribution received by a U.S. stockholder will first be applied against and reduce the stockholder’s adjusted tax basis in its Altaba common stock, before the stockholder recognizes any gain or loss. A U.S. stockholder will recognize gain as a result of a liquidating distribution to the extent that the aggregate value of the liquidating distribution and any prior liquidating distributions received by the stockholder with respect to a share exceeds the stockholder’s adjusted tax basis in the share. A U.S. stockholder generally cannot recognize a loss on a liquidating distribution until the final liquidating distribution is made, and then only if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder’s adjusted tax basis in the share. If a U.S. stockholder holds different blocks of Altaba common stock (generally as a result of having acquired shares at different times or at different prices), gain or loss is calculated separately with respect to each such block. Any gain or loss recognized by a U.S. stockholder will be capital gain or loss provided the stockholder holds its Altaba common stock as a capital asset.
As the above information suggests, for tax purposes, you must reduce your basis in your Altaba stock by the amount of the distributions you have received. In other words, you are not paying tax on the distributions per se because the distribution(s) are a return of your capital. It is only when you have recovered your basis in the stock, that you might have a capital gain.
Does any of the above relate to your situation? In other words, are you a shareholder in Altaba stock? Follow-up with any additional information, and then we can provide some additional information about how you should report the information on your 1099-B. Also, here is a link to the Investor FAQs webpage from which the above information was obtained.
Altaba FAQs
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