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kelleywjones
New Member

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

The company was sold in 2014 and at the beginning of this year I received a small final distribution. The only thing on the 1099-DIV is an amount in Box 8.
8 Replies
Lakeisha
New Member

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

Here is where you would make this Entry:

Proceeds from cash liquidation distributions are reported on Form 1099-DIV. There should be an option on the Div entry screen that your 1099-Div has info in more than these boxes .  click that and fill in the box amount for box 8 for the amount reported.

Then to the extent that the amount of distribution that is in excess of the recipient's original investment is taxable. The gain is then reported on schedule D.  You would do that as if you received a 1099-B.  So in search box type 1099-B and select jump to and it will get you to the investment sales section.  This is only reported to the extent the amount is greater than your cost basis!!!!!!!!!!!!

In most cases this is unreported on Schedule D.... normally your basis is greater.

The the amount is just a reduction in your cost basis.  You would only recognize gains only if it fully reduced your basis below 0.

I hope this helps!
kelleywjones
New Member

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

I know that this distribution is taxable as it is a final distribution, I just don't know how to input it in TurboTax. I have entered it into the 1099-DIV screen and then it tells me to go to the investment income section under wages & income. Once I go there, I am not sure what to do next.
stevepaa
New Member

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

same problem here.  Once company is sold above basis, there is no place to input this cash distribution.  The wages & income section does nothing
stevepaa
New Member

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

and schedule D form does not allow user to enter data, neither does form 4797.  it looks like the only place to do this is to click on form 1040 line 21 and then enter the data on line 8 on the other income sheet

turbot tax will not do it in easy step, you need to go to forms and force the issue
stevepaa
New Member

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

scratch that last,  go to easy step and under less common income, select misc income, and then down to other reportable income and selcet update and supply data,  it will then go on on 1040 line 21
sapnhily
Level 2

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

If I input the Cash liquidations on the Schedule D, then the total Sales Proceed is different the the total proceed on 1099 B as reported by the broker to IRS.  Would this different in proceed cause a problem when the IRS can’t match the data between Schedule D and 1099B?

DavidS127
Expert Alumni

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

To avoid any concerns about 1099-B matching issues when you enter your final cash distribution, you can pick to "Add a Sale" at the bottom of your "Here are all your investment sales" screen.  Then select No to the question "Did or will you receive a 1099-B form or brokerage statement for these sales?

 

Start with the instructions provided by Community user Lakeisha, or just click the "magnifying glass Search" icon on the top row, enter "1099b" in the search window and press return or enter, and then click on the "Jump to 1099b" link and you will be at the "Here are all your investment sales" screen.

 

Note that this treatment affords you Schedule D capital gain treatment instead of the ordinary income treatment you would get if entered as "Other Income".

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sapnhily
Level 2

How do I enter a Cash Liquidation Distribution that is a final distribution from the Company?

Thank you so very much!  Your advice give me confidence to finally click submit to file my return.

 

kind regards,

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