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Investors & landlords
The Dell RSUs should be entered into TurboTax in the same manner as any other RSU, and it appears you have already begun that process. The VMWare special stock dividend requires a different approach. In November 2021, VMWare issued a Special Dividend Logistics FAQ which included, among other things, the following information about the special stock dividend:
VMware currently estimates that, for federal tax purposes, 39.49% of the Special Dividend will be treated as a taxable dividend, with the other 60.51% of the Special Dividend being first treated as a return on capital to stockholders to the extent of their basis in VMware common stock, and thereafter as capital gain...
The taxable dividend may be eligible for treatment as a qualified dividend for federal tax purposes depending on the holding period of the underlying stock and other personal tax matters. The precise tax impact of the Special Dividend to specific stockholders depends upon the stockholder’s individual tax situation.
Based on the above information, do not treat the special stock dividend the same way you would handle an RSU. At least part of your special stock dividend should be entered into TurboTax in the section reserved for dividends. A portion of your special stock dividend may be a return of your capital, and the remaining part will be capital gain. The capital gain amount, if any, is entered into TurboTax in the same section of TurboTax where you enter your Dell RSUs; however, it should be entered the same way as any stock sale that results in a capital gain.
Here is a link to the VMWare FAQ referenced above.
VMWare Special Dividend Logistics FAQ
@Jordan1997
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