If you owned shares of Altaba (AABA) you would have received a liquidating distribution. This should have been reported to you on a Form 1099-B by the broker where you held the stock. It would be reported the same as a stock sale. If you did not hold it with a broker dealer, you will still need to report it as the "sale" of an asset.
This was not a stock sale; It was a cash liquidation distribution and was reported on a 1099-DIV. I still own the stock and there maybe another cash distribution in 2021. The distribution was more than I paid for the original stock (12 years ago) so I have a long term capital gain but can't figure out how to report this in Turbo. The 1099-DIV cash distribution needs to be reduced by the amount I paid for the stock. Where do I report the deduction?
You need to report the 1099-DIV where you report dividend income in TurboTax. Can you tell us what boxes have numbers in them on the form please?
Similar situation here. Box 9 on 1099-Div shows Cash liquidation for AABA. I don't see how to show that in Turbo. It doesn't appear that the cost basis is shown anywhere on the form.
Just to clarify the above. This was a Partial Distribution from AABA - the balance is in escrow to be paid this year or next (don't recall). The amount I received in Box 9 was more than my cost basis. Just can't see how to show this. I imported from my brokerage but the amount on Line 9 doesn't seem to show up anywhere else in Turbo.
I'm in the same situation. My 1099-DIV has the following (non zero) numbers (123 and 1234 below are for illustrations only):
Box 1a and 1b (same amount 123.00)
Box 9 - cash liquidation distributions (1234.00)
The rest of them contains 0.00. I see the following (other) sections on page 1 of the same form:
1099-MISC
1099-B
SUMMARY OF PROCEEDS, GAINS & LOSSES, ADJUSTMENTS AND WITHHOLDING
but they are all showing 0.00. All I know is that I bought YHOO (Yahoo) in late 1999 and early 2000. I never touched it since then. It's a loss for me (in the thousand dollars).
How do I file this? Help please.
I found the following IRS publication:
Publication 550 (2018), Investment Income and Expenses
(Including Capital Gains and Losses)
For use in preparing 2018 Returns
https://www.irs.gov/publications/p550
Liquidating Distributions
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 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.
Distributions less than basis.
If the total liquidating distributions you receive are less than the basis of your stock, you may have a capital loss. You can report a capital loss only after you have received the final distribution in liquidation that results in the redemption or cancellation of the stock. Whether you report the loss as a long-term or short-term capital loss depends on how long you held the stock.
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I'm no tax expert. I don't know if the above publication is the answer. I also searched for a more updated publication (for tax year 2019) but didn't find any. Since AABA 2019 liquidation is partial, I am guessing I can't file capital loss for tax year 2019. Am I right? If that is correct, what do I do with Box 9 (cash liquidation distributions) numbers? Ignore it?
Box 9 has the amount of cash received for the distribution of AABA and box 1a and 1b have "normal" dividends, ordinary and qualified. Box 1a and 1b are for other stocks as this is a consolidated form from TDAmeritrade.
How do I calculate our cost basis for YHOO shares purchased as part of an ESPP? Does anyone know of a website or other tool that would list historical data for this? I know the date the shares were purchased, but not the amount. Thanks.
FWIW, I also did not receive a 1099-B since this wasn't a "sale" per se, but it sounds like TurboTax is guiding me to enter it as such. My cost basis is lower than the distribution, as the shares were purchased in 2009.
If it is not a sale, why are you reporting it?
When you sell Employee Stock Purchase Plan (ESPP) stock you should get a 1099-B and Form 3922.
To enter it in TurboTax you enter the 1099-B normally and select 'guide me step by step' to enter ESPP and 3922 information.
I am also figuring out how to handle the AABA cash liquidation scenario.
I got a 1099-DIV form from my brokerages. Sections 1-8, and 10-15 is all 0.00. Section 9,
Cash Liquidation Distributions, is the total amount of cash I received as part of the partial liquidation.
I know my cost basis from when I bought the stock (ESPP), so how and where do I enter in the profit I made?
Hypothetically, say I had 10 shares at a cost basis of $20, and was given $50 for the partial liquidation so far.
How do I enter in the $300 profit I made so far: 10 shares x $30 ($50-$20)
Do I pay the taxes now? Or do you have to wait to pay taxes after I get the full liquidation (1 or so years from now)?
Vannerpham- I have the exact same question. I know they say another distribution is due 4th quarter 2020 and a final distribution estimated in 2022. I sure hope someone that "knows" answers your question as i'm stuck. I'm still researching so if I find something I'll let you know.
FYI there's a similar discussion here:
https://ttlc.intuit.com/community/taxes/discussion/1099-div-box-9-how-to-report/00/134868
How do I handle altabba (AABA) cash distribution in turbo tax
Very likely you would report it as a 1099-DIV. See post from TaxNoob18 from above.
To enter a Form 1099-DIV, here are the steps:
In TurboTax online,
@albertpet
Hi, Has anyone figured out how to report this? Do we ignore it for now and use the adjusted cost basis when the final distribution is made?
See IRS publication 550, page 21
Liquidating Distributions
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 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.
Stock acquired at different times.
If you acquired stock in the same corporation in more than one transaction, you own more than one block of stock in the corporation. If you receive distributions from the corporation in complete liquidation, you must divide the distribution among the blocks of stock you own in the following proportion: the number of shares in that block over the total number of shares you own. Divide distributions in partial liquidation among that part of the stock redeemed in the partial liquidation. After the basis of a block of stock is reduced to zero, you must report the part of any later distribution for that block as a capital gain.
Distributions less than basis.
If the total liquidating distributions you receive are less than the basis of your stock, you may have a capital loss. You can report a capital loss only after you have received the final distribution in liquidation that results in the redemption or cancellation of the stock. Whether you report the loss as a long-term or short-term capital loss depends on how long you held the stock.
Thanks, how do we handle partial distributions? Do we wait till the final distribution is made?
Not sure where I printed it from, but was in Turbo Tax explanation regarding "Liquidation Distributions":
"When a corporation, ....undergoes a partial or or complete liquidation, you may get a cash ...distribution. An amount designated as a cash....distribution is often not taxable, but instead reduces your basis in the stock you own. If a cancellation of stock occurs from a liquidation, a loss can be claimed the year the final distribution is received if total distributions are less than the basis.
When you sell the stock, your cost basis for figuring gain or loss is reduced by any distributions you received.
However, in the following cases the distribution is taxable and you need to report the distribution as a liquidation sale in the Investment Income section of TurboTax:
- Your cost basis in the stock is zero.
-Your cost basis is less than the distribution amount. (This is my case as bought it long time ago. So I will be showing Capital Gain for 2019 year.
-This liquidation is a final distribution from the company." (And assume another Capital Gain when they give the final distribution next year???)
Reading various posts on this forums about stock liquidation and AABA, I've figured out how I should report them to IRS. I've both RSUs and stock obtained thru ESPP. Reporting RSUs is straightforward -- I know my vesting dates, and so I've been able to find the FMV on those dates for cost basis. I also figured out my cost basis for ESPP, and what the 'bargain' factor is. The only trouble I'm having right now is that TurboTax isn't allowing me to enter that bargain factor without a W2, either from Yahoo!/Verizon or Altaba, because that amount is well over $2k. I contacted Verizon and they said Altaba should issue the W2. I guess that makes sense because it's AABA after all that I held and got liquidated. I contacted Altaba Inc. via email a couple of days ago but have yet to hear back. If they don't respond, or say they don't/won't provide a W2, I'm not sure what to do here.
So:
- Is one required to report the bargain element of ESPP? I think yes, even if it's a (partial) liquidation and not a sale.
- Can it be reported without a W2? TurboTax says no, at least when it's above $2k.
- If a W2 is required, has anyone got one from Altaba?
All I need is a W2 and then I'm thru!
-TC
I contacted them and was informed that there will be another distribution this year of unknown amount. The question is, how would we know when the final liquidation will be distributed?
You won't know positively until you receive it or by contacting the organization handling the liquidation. The following information can be found by using Google.
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.
Thanks but I already read that information in 2020 when preparing my 2019 tax year.
My AABA cost basis is more than the first liquidation distribution amount in 2019. I didn’t know, but I already entered that basis in last year’s return and claimed it as a loss.
Does that mean the 2nd liquidation amount from 2020 and any future distribution would all be capital gains with a basis of zero, right?
thanks