There appears to be a bug in TurboTax Premium with regard to the reporting of the Liquidation Distribution/Dividend from Form 1099-DIV, Box 9. The only place in TurboTax to enter this figure is in the "Interest and Dividends." When you enter the figure and continue you get a screen message which states "We'll handle your cash liquidation distribution of $__________ from ___________ later." At some point when cycling through the TurboTax screens, you are asked to complete Form 7203 which appears on the screen ready for entry. Form 7203, once completed, provides your basis which should be deducted from your Liquidation Distribution on Form 1040, Schedule D to determine your gain or loss, whether it be short-term or long-term. This information should also be shown on Form 8949.
The problem is that TurboTax never populates Schedule D and when searching for a Form 8949 in TurboTax, I found a statement that Form 8949 is created automatically based on input to Schedule D. When I get all the way through the TurboTax input tabs and get to "Review," I get a message stating that everything looks good. TurboTax never returned "later" to the issue of the Liquidation Distribution nor did it calculate the additional tax on what should have been calculated, in my case, as a long-term gain.
I discovered that I can force the entry of the Liquidation Distribution, my basis and the long-term gain on Schedule D in the Forms area of the software. That does adjust my taxes due for the long-term gain however, the required Form 8949 is still not available and I am getting various error messages.
Also worth noting, although this is an IRS issue, is that Form 8949 does not easily accommodate the entry of information from a 1099-DIV. Form 8949 is set up for entries from 1099-Bs. In order to get around this problem, you have to check one of the Boxes for transactions not reported to you on a 1099-B (Box C in Part L or Box F in Part II). I mention this because this could become an issue in TurboTax once Form 8949 is added.
I desperately need to resolve this dilemma because my tax return is far too complicated to file a paper version. Any help that is offered would be greatly appreciated!
