I received a distribution from a trust . I received a K-!, form 1041 as the trust beneficiary. Where do I report a nondividend distribution that is a return of capital?

[tagteam · Accepted solution]

"Where do I report a nondividend distribution that is a return of capital?"

That figure does not get entered anywhere on your income tax return since it is a return of capital from an investment, such as a stock, bond, or a fund.

You would ordinarily keep track of this figure because it will reduce your cost basis when the investment is sold but, in this instance, the trust will (or should) be keeping track of the basis since the trust owns the investment vehicle.

[Nik525]

Thank you! I like this answer!

[tagteam]

You are most welcome.

[loukur]

tagteam is exactly correct. I have spoken with my trust officer who told me not to worry about the basis [i.e. return of capital], because they are tracking and will report when the trust ends.