topic Re: Dividend adjustment in Get your taxes done using TurboTax

Dividend adjustment

WinstonS — Tue, 24 Feb 2026 03:34:50 GMT

In 2022 I bought a preferred stock. The purchase date was between dividend payouts for the stock. As part of the purchase, I paid what the trade confirmation refers to as 'accrued interest', although it really should have said 'accrued dividend'. The stock paid dividends in 2022 but I need to reduce what was reported on form 1099-DIV by the amount of the accrued dividend that I paid as part of the purchase. In TurboTax Deluxe, desktop edition, I enter the 1099-DIV, click continue, and come to the 'do any of these uncommon situations apply to you?' screen. I choose 'I need to adjust these dividends' and click continue. I enter a positive amount for the adjustment and choose 'other adjustment'. However, the amount TurboTax uses for the dividend reduction is not what I entered. As an experiment, I entered 200.00 for the adjustment. TurboTax lists an adjustment on schedule B of 196.62. Line 3b (ordinary dividends) on form 1040 is reduced by 197 and line 3a (qualified dividends) on form 1040 is reduced by 196.

I assume that my thinking on how to reduce the dividend amount is correct but how do I get TurboTax to accept the actual adjustment I want to make?

Thank you.

Re: Dividend adjustment

Mike9241 — Tue, 07 Mar 2023 18:07:04 GMT

Turbotax's bad programming. when you enter an adjustment it is prorated against certain other lines.

say line 1a of 1099-DIV is $80 and line 2a is $20 (all dividends not just the specific one). if the adjustment is $5. TurboTax applies the $5 pro rata to lines 1a and 2a so dividends come through as $76 and capital gains as $19 obviously incorrect. the only way around this is to enter 1 1099-DIV without this specific dividend and adjusting all other lines affected by it then enter a second 1099-DIV reporting only this specific dividend and the adjustment - only line 1a is needed because after adjustment all other lines should be zero.

Re: Dividend adjustment

WinstonS — Tue, 07 Mar 2023 18:40:59 GMT

Thanks Mike9241! You are exactly right that the dividend adjustment also reduced capital gains, which is wrong. What a dumb error. Since there are so many boxes on the 1099-DIV, you would think that if you choose 'I have an adjustment', a screen would appear allowing adjustments in all boxes.

In my specific case, the only investment affected was a qualified dividend. I received more dividends than I paid out in accruals. So I will try your suggestion, except I will enter amounts in 1a and 1b of my 'fake' 1099-DIV for the total of the affected investment. Then I will 'adjust' that amount using TurboTax's feature. Fingers crossed that gives me the amount I'm looking for.

Thanks again for your response.