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Level 2

AABA cash liquidation and stock sells

Hi community,

 

I had AABA shares and received cash liquidation reported in 2019 1099-DIV box 9.  Based on the relevant threads here, this cash liquidation is partial as there will be distributions in 2nd half of 2020 and 2022. I also sold all AABA shares before it went off the market. I am curious how I should report the capital gains in my tax return.

To simplify, let's assume the following for discussions:
1. My cost basis is $70. The shares were acquired on 2/10/2012.

2. Cash liquidation distribution is $200 (box 9 in 1099-DIV). Liquidation date was 9/26/2019.

3. I sold all shares on 10/1/2019. Sell price is $50.

For my tax return this year:

1. I fully recovered my basis from the liquidation distribution, thus I need to report $130 ($200 - $70) as long-term capital gain. 
2. My adjusted cost basis is becoming $0 because it's fully recovered

3. I also need to report $50 ($50 - $0) as long-term capital gain from stock sells

4. Together, I have $180 ($130 + $50) for long-term capital gain

5. Since I sold all my shares, is the liquidation I received last year is considered final? Will I get more distributions in the future (H2 2020, 2022)?

 

Please let me know if my understanding is correct, thanks!

 
 
 
 
 
3 Replies
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Level 2

AABA cash liquidation and stock sells

Hey @EclatC , how are you reporting this? I'm on the same boat. Got the distribution and a few days later sold all shares. Since I sold all shares I believe this distribution will be the final one. I'm assuming I need to report full capital gains for the 1099-DIV and use the cost basis for the 1099-B.

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Level 2

AABA cash liquidation and stock sells

I used the way I described in original post. If your cost basis was recovered from liquidation distribution, then your cost basis for 1099B remain unchanged, which is $0

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Level 2

AABA cash liquidation and stock sells

I ended up doing that too. I just had to figure out the cost basis. And since I had some espp too I had to figure out the ordinary income part of it too.