how do I enter cash liquidation distribution from form 1099-div

[CatinaT1]

To enter a cash liquidation distribution from your Form 1099-DIV into TurboTax Online, follow these direct navigation steps:

1. Select Federal from the left-hand menu.
2. Select Wages & Income from the top menu bar.
3. Scroll down to Interest and Dividends (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) section and select Show more to expand the list.
4. Select Start or Revisit next to Dividends on 1099-DIV.
5. Choose to import your document automatically or select Type it in myself.
6. Enter the payer's information and any standard dividend amounts in the primary fields.
7. Select the checkbox next to My form has info in other boxes (this is uncommon). This action will expand the digital form on your screen.
8. Locate Box 9 - Cash liquidation distributions and enter the exact dollar amount printed on your physical Form 1099-DIV.
9. Select Continue to save the entry.

[RouterGreenChef]

I am trying this same thing, and that workflow does not seem to work. Whether I upload the 1099-DIV and allow the app to extract the information, or enter it manually, both enter up in the same state -- the box 1 amount shows as $0 (which is correct), but the box 9 (liquidation distribution) amount does not appear to contribute to overall income at all.

The wizard claims "We'll handle your cash liquidation distributions from XXX later", and "Just remember to go to the Investment Income section under Wages & Income" ... but a) it never prompts me to add cost basis information to them, b) I cannot find any relevant section under that section that lets me advance things at all, other than editing the form again.

To be clear - the literal data entry step is fine, its what I assume is the next step (figure out how much if any this distribution contributes to income) that I cannot figure out.

[DianeW777]

Report these liquidating distributions as indicated below, if you have recovered your full cost basis of the stock.

Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. These distributions are, at least in part, one form of a return of capital. They may be paid in one or more installments. You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 and/or 9.

Any liquidating distribution you receive is 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.

• Where do I enter a capital gain?

@RouterGreenChef 

[RouterGreenChef]

Understood re: the reporting requirement and basis...

Seems like the app just assumes everyone is below their basis amount on a liquidating distribution (or, in my case, an irregular private stock buyback where they've used box 9 on a 1099-DIV) and doesnt prompt for basis/gain? IE, you can upload the form, confirm the amount, and then just proceed with the return since there's no gain to calculate?

Presumably if you had recovered your basis, either in earlier transactions or in net after the reported sale, is there actually a way to enter this in conjunction with the information reported in box 9? Or does it make more sense in this scenario to just totally ignore your 1099-DIV and enter basis/sale/gain/etc amounts separately in some other area?

[DianeW777]

It depends. The link included in the previous post does show how to report the gain, if applicable. Unfortunately, only you really know whether you have any cost basis left to make the liquidating distribution tax free.

The result actually means, if you don't know, or have no records of your cost basis, consider it all taxable. Report it as follows if you are certain you have recovered all of your cost basis for the investment. Otherwise if you do know your cost basis, and you haven't yet recovered it all, then it's tax free.

To enter your liquidating distributions in TurboTax, follow these steps. 

1. Open or continue your return.
2. Navigate to the investment sales section:
   • TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
   • TurboTax Desktop: Search for investment sales and then select the Jump to link.
     • Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (select Other)
3. Answer Yes to the question Did you sell any of these investments in 2025? 
   • If you land on  the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.
   • Click this link for more information. Where do I enter Investment Sales?

• @RouterGreenChef 

[RouterGreenChef]

Thanks for confirming re: basis.

I still dont understand how, after creating the investment (either by uploading the 1099 and having the app read box 9, or by entering it manually) I can go in and either add cost basis or adjust a gain or similar.

The app tells me to go to the "investment income" section under "wages and income". I dont see anything with exactly that name, and everything similar I look at does not have an option to adjust this sale.

This other thread has the same question - https://ttlc.intuit.com/community/taxes/discussion/how-do-i-enter-cash-liquidation-i-entered-it-in-b... - and suggests using the "other (land, homes, ...)" flow to manually create, and choose "other" for type, then do manual proceeds/basis amounts.

Is that what's expected in this scenario? If so, I assume I should also remove my originally uploaded 1099 so its not there twice?

[DianeW777]

If it's already uploaded, you should be able to select just go to that investment transaction and edit it.

1. TurboTax Online: Select Tax Home on the left panel > Select any Income category or Pick up where you left off
2. Select Tax Tools > Tools > Select Topic Search > Type 1099b  > Select GO (should be landed on 1099b)
3. For TurboTax Desktop: Search > Type 1099b > Click the Jump to .. link
4. Scroll to find your specific investment to edit.
5. Continue to follow the prompts to enter the information yourself

@RouterGreenChef