Yes, that's correct. Once the adjusted cost basis of your stock has been reduced to zero, any further non-dividend distribution is a taxable capital gain that you report on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D, Capital Gains and Losses. While you may have already completed these steps, here they are again.
- Select the Personal tab.
- Select the Personal Income tab.
- On the next screen you will see the option to Walk me through everything, and the option to I'll choose what to work on. Select the latter.
- Scroll down the screen to Investment Income and select Stocks, Mutual Funds, Bonds, Other.
- Enter your information.
When you arrive at the screen, Tell us about this sale, you will enter information that will populate Form 8949. To the extent you have already recovered your basis in the stock, the excess, as you have noted, is capital gain. Thus, on this page your cost basis will be zero, and the Sale proceeds will be your capital gain. The date acquired is the date you purchased the stock and the date sold is the date of the distribution.
@pfgold
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