Investors & landlords

Reporting a liquidating dividend reported in Box 9 (or 10) of Form 1099-DIV:  First understand any liquidating distribution you receive is not taxable until you have recovered the basis of your stock. After the basis of your stock has been reduced to zero, you must report the liquidating distribution as a capital gain. If the total liquidating distributions you receive are less than the basis of your stock, you may have a capital loss. You can report a capital loss only after you have received the final distribution in liquidation that results in the redemption or cancellation of the stock.  In other words, the liquidating distribution may or may not be a reportable transaction in 2023.  This is why the amount entered in box 9 of the 1099-DIV entry does not flow to any other form, schedule or worksheet.  Basically, it's informational - it is used to determine/calculate your gain or loss.

Once you have determined you have a reportable transaction and calculated your gain or loss, you will report it the same way you would report the sale of common stock or other investments.  To do so in TurboTax:

• Type "Investment sales" in the search window and click Enter
• Click on "Jump to Investment sales"
• On the page with "Did you sell any investments in 2023?"  Answer Yes,  or
• If you have already entered investment sales click on "Add more sales"
• Indicate "Other" and click "Continue"
• If asked, answer No to "Did you get a 1099-B..."
• Enter a name of the person or entity that brokered the sale (enter anything you want, or you can leave this blank)
• On the "Now we'll walk you through entering your sale details" Indicate "Other"
• The interview will walk you through entering the details of reporting your gain.

Reporting the transaction as described above will result in TurboTax opening both Form 8949 and Schedule D.  

You will also need to complete Form 7203 - S Corporation Shareholder Stock and Debt