The liquidating distribution would only be taxable and reported on your tax return if it exceeds your basis in the investment.
Your basis is basically your original investment, plus additional money your contributed, plus your share of income from the investment, less losses, less distributions in prior years.
If you determine that your distributions exceeded your basis, you would need to report a sale of investment in TurboTax as follows to report the capital gain realized:
1. Find the "Income and Expenses" menu option in your TurboTax program
2. Find "Investment Income" in the list of categories
3. Click on "Stocks, Mutual Funds, Bonds and Other"
4. Work through the program to find "Choose the type of Investment you Sold"
5. Choose the "Everything Else" option in the list of investments
6. Enter the information requested about your sale (date purchased, sale amount, cost, etc)
The sale amount would be the taxable gain and the cost basis would be zero (-0-).
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