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

[kelleywjones]

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.

[Lakeisha]

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]

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]

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]

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]

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]

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]

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".

[sapnhily]

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

kind regards,

[Cheryl46]

Using 2023 Premier version do I have to enter each individual sale from the 1099 -B in order to account for Cash Liquidation Distribution?  I manually entered the 1099-Div including Line 9 and 1099-B A, B & D total proceeds (form type 8949) and received the messages "We'll handle your cash liquidation distribution...later."  Following advice from TT, I went to Investment Income (under Wages & Income) but there was no way to enter the fund liquidation cost basis, dates, etc..  I initially had the brokerage firm download the 1099-B but the grand total (loss/gain) was off and TT required I review each sale on  to determine difference before proceeding.  I deleted this and manually enter the 1099-Div.  In order to account for cash liquidation distribution do I need to enter each individual sale (there were over 65 sales)? 

[DianeW777]

No, you can enter summary totals one for long term sales and one for short term sales.  You can always use direct entry if you choose, with summary totals.  The only exception is for wash sales, which must be entered separately, if you have any.  Your brokerage statements should include a summary of your transactions, grouped by sales category, for example, Box A short-term covered or Box D long-term covered.

1. Long term: held more than one year (one year plus one day)
2. Short term: held one year or less

TurboTax Online:

1. Open or continue your return (if it's not already open) and search for stock sales
2. Select the Jump to link in the search results
3. Answer Yes to Did you sell any of these investments in 2023?
   • If you land on Your investment sales summary, select Add more sales
4. On the OK, let’s start with one investment type screen, select Stocks, Bonds, Mutual Funds, then Continue
5. On the Let's import your tax info screen, select I'll type it myself
6. Step through the interview and select Sales section totals when prompted to choose how to enter your sales
7. You'll now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue
8. You can add additional sales totals by selecting the Add another sales total on the Review your sales section totals screen

TurboTax CD/Download:

1. Open or continue your return (if it's not already open) and search for stock sales
2. Select the Jump to link in the search results
3. Answer Yes to Did you sell any investments in 2023?
   • If you land on Here’s all the investment accounts we have so far, select Add more sales
4. Answer Yes to Did you get a 1099-B or a brokerage statement for these sales?
5. On the screen Let Us Enter Your Investment Sale Info, select I’ll type it in myself and Continue
6. Enter the name of your bank or brokerage on the screen Which bank or brokerage sent you this form? and Continue
7. On the screen Tell us about your 1099-B, select I’ll enter a summary for each sales category
8. You'll now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue
9. On the screen Do you have another sale to enter from your 1099-B? select Yes to enter more sales from your 1099-B, or No to see a summary of the sales you already entered, then select Continue
10. Once you’ve entered all the sales on your 1099-B, you’ll see a summary of all the sales reported. Select Done

If you are e-filing your tax return, then mail your statements (1099-Bs or other document showing detailed sales information) along with Form 8453 to: 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254