Return of Capital default distribution on bond

I received a partial distribution of a return of capital from a court ordered settlement on a bond in default. The bond is not yet worthless. The proceeds were reported on form 1099-B. How is the income treated?

posted

I return of capital would not be taxable; however, you still need to report the Form 1099-B. If properly coded, you won't owe any tax on the distribution.

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