A company (not publicly traded) we have equity in did an equity distribution. Some of the distribution was dividends and was taxed as ordinary income on payment. The other part of the distribution was not taxed but I believe it was a reduction of the basis of the original investment. In the form the company filed with the IRS it read:
The distribution to Class A Unit holders was $518,707,093. 18.14% of the distribution is estimated to be a taxable dividend (with no effect to basis). The remaining 81.86% of the distribution is a reduction in the basis of each unit. To the extent the tax basis of a unit is less than the percentage of payout estimated to be a reduction in basis, the excess is recognized as a capital gain. The distribution to Class B Unit holders was $0.10 per unit. None of the $0.10 per unit distribution is estimated to be a taxable dividend. The Class B distribution per share is a reduction in the unit basis of each unit. To the extent the
tax basis in the unit is less than $0.10 per share, the excess of the $0.10 over the basis in that unit is recognized as capital gain.
With the above information do I:
-Pay taxes on the dividends, which has already been done so no reporting.
-Reduce the basis of the original investment
So with a reduction of the basis and taxes already paid on the dividends, I don't believe there is anything else to report to the IRS. Is this correct?
