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If you reported a loss on this investment in a prior year then this income is reported. See the steps below and the screenshot attached if you received a tax benefit from the original loss.
Tax benefit rule. You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year.
In TurboTax Premier follow these steps:
If you reported a loss on this investment in a prior year then this income is reported. See the steps below and the screenshot attached if you received a tax benefit from the original loss.
Tax benefit rule. You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year.
In TurboTax Premier follow these steps:
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