Not sure where I printed it from, but was in Turbo Tax explanation regarding "Liquidation Distributions":
"When a corporation, ....undergoes a partial or or complete liquidation, you may get a cash ...distribution. An amount designated as a cash....distribution is often not taxable, but instead reduces your basis in the stock you own. If a cancellation of stock occurs from a liquidation, a loss can be claimed the year the final distribution is received if total distributions are less than the basis.
When you sell the stock, your cost basis for figuring gain or loss is reduced by any distributions you received.
However, in the following cases the distribution is taxable and you need to report the distribution as a liquidation sale in the Investment Income section of TurboTax:
- Your cost basis in the stock is zero.
-Your cost basis is less than the distribution amount. (This is my case as bought it long time ago. So I will be showing Capital Gain for 2019 year.
-This liquidation is a final distribution from the company." (And assume another Capital Gain when they give the final distribution next year???)
