Got 1099-DIV from REIT with (Box9) cash liquidation distribution. I also need to enter a cost basis but the screen for 1099-DIV does not have a place for that. I understand that this should end up in Form 8949. But how do I enter the information? Have Desktop TurboTax.
Enter a Date Acquired so that TurboTax can verify LT/ST. The gains are taxed differently. You can use the date when you first acquired the REIT (or any date over one year prior to sale).
If you know the Cost Basis, enter it. Keep records of that amount.
You won't need to attach anything about the Cost Basis to your return.
A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate.
Like mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investment, with out having to buy, manage, or finance any properties themselves. If held long-term, REIT's growth reflects the appreciation of the property it owns.
For Box 9: Liquidating distributions are distributions you receive during a partial or complete liquidation of a corporation.
These distributions are considered a return of capital.
Liquidating distributions are not taxable to you until you have recovered the basis of your stock.
After the basis of your stock has been reduced to zero, you must report the liquidating distribution as a capital gain.
Whether you report the gain as a long-term or short-term capital gain depends on how long you have held the stock.
If the liquidating distribution shown in Box 8 or 9 is a complete liquidation, then report the amount in Box 9, on the stock sale screen as a stock sale.
You will report it in the Investment Income section under Stocks, Mutual Funds, Bonds and Other.
You need to enter the information in the section for Stocks, Mutual Funds, Bonds, Other.
The first screen asks is you sold Stock, Mutual Funds, Bonds, or you click on Other.
Here you want to click on Other, since you did not receive a 1099-B for this sale. Then you can add the information you have about the sale.
Choose "Stock" if it asks you what type of investment you sold.
Click here for a Guide to Schedule D Capital Gains and Losses.
"The first screen asks is you sold Stock, Mutual Funds, Bonds, or you click on Other."
"Here you want to click on Other, since you did not receive a 1099-B for this sale. Then you can add the information you have about the sale."
I did not find "Other." So I stumbled around. If I chose "no form 1099B", I end up with an entry that says "No Financial Institution. See attached statement."
But if I chose to enter the REIT's name as a Financial Institution, then I get a labeled entry with name & Acct #.
About that attached statement: I need to submit a copy of my 1099-B it says. But I have a 1099-DIV and a memo from my investment advisor with a cost basis. The IRS will receive the 1099-DIV so why would I have to send it again?
It is not clear what needs to be reported. For example, as noted in a prior post, if your 1099-DIV only contains a cash liquidation distribution (box 9), then that amount just reduces your cost basis. There is nothing to report on your tax return, but you will want to keep your 1099-DIV in the event you decide to sell your REIT because you will need to make an adjustment to basis. However, there may be a situation where you will need to report a capital gain. In this regard, if the cash liquidation distribution is greater than your basis such that your basis is reduced to zero, then the excess cash liquidation distribution becomes a capital gain and is reported as such in TurboTax. Did you sell any part of your REIT in 2022?
If you received a dividend from the REIT in addition to the amount in box 9, then that dividend is entered by going to Interest and Dividends and then selecting Dividends on 1099-DIV.
"In this regard, if the cash liquidation distribution is greater than your basis such that your basis is reduced to zero, then the excess cash liquidation distribution becomes a capital gain and is reported as such in TurboTax. Did you sell any part of your REIT in 2022?"
Yes. All of REIT sold in 2022. So yes it is a capital gain.
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Working from Turbo Tax Screens:
Did you get a brokerage statement? I got a 1099-DIV with both a 2a (Capital Gain Distribution) and Box 9 (cash liquidation distribution).
Which brokerage sent the form? I assume that “REIT_X” is a brokerage and enter that.
It is one sale. So I enter Sale #1
Description: Purchase + Dividend Reinvestments [Is that good enuf? I don’t have share numbers]
Date sold:
May 20, 2022
Date acquired: Various. [But definitely long-term]
Sale amt: I have
Cost basis: I have memo from Investment Firm, not REIT.
Sales Category: Long Term noncovered (Cost basis not reported on 1099)
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Looking back at what I entered and my assumptions, kindly advise.
I believe that an Attachment about the Cost Basis will be necessary. Would I enter that somewhere in the form?
Thanks for your help.
Enter a Date Acquired so that TurboTax can verify LT/ST. The gains are taxed differently. You can use the date when you first acquired the REIT (or any date over one year prior to sale).
If you know the Cost Basis, enter it. Keep records of that amount.
You won't need to attach anything about the Cost Basis to your return.