cash liquidation distribution

[turboquestionnow]

I downloaded TD Ameritrade to Turbo Tax.  Turbo Tax came back with a page that said "We'll handle your cash liquidation distribution of $410 from TD Ameritrade later. Just remember to go to the Investment Income section under Wages & Income" I am done with entering all my numbers and now I back at Wages & Income section but I see nothing that helps me to see whether Turbo Tax has entered this amount from TD Ameritrade on my tax return. Please help.

[GeorgeM777 · Accepted solution]

Your cash liquidation distribution was likely reported on a 1099-DIV, box number 9.  To the extent the cash liquidation distribution represents a return of your capital, it is not taxable; however, it still should be reported on your return.  Any amount in excess of your capital is also taxable, and reported as a capital gain.

If you are using TurboTax online, review the Investment & Savings section (Stocks, Mutual Funds, Cryptocurrency) and see if the $410 has been included in your list of transactions. If not, you can add it.  If it is there, check your cost basis.  A zero as the cost basis would mean that the full amount of the distribution has been taxed as a capital gain.  If you have a cost basis, you can adjust the cost basis amount so that the capital gain is accurate.  

If you are using TurboTax CD/download, the cash liquidation should be in the Investment Income section.  

If the entire distribution represents a return of your capital, then you can enter your cost basis as $410.  Because cost basis and proceeds would be equal in this scenario, you would have neither a gain nor loss. 

@turboquestionnow 

[turboquestionnow]

Thank you GeorgeM777! Your contribution is very much appreciated. I took your advice and went back looking for the basis of that stock's liquidation but oddly enough, on TD Ameritrade's original monthly statement, the $410 was listed as ordinary dividend, yet on the 1099 composite, it was classified as Cash Liquidation Distribution. Anyway, the amount is way lower than my capital invested in that stock so I am not going to worry about excess capital contribution. Just thought it was odd and how reliant and trusting I have become to whatever came out of the broker's computer.

[Rosmakloma]

Hello, I have the same question but am unable to resolve it from the previous answer.  

Turbo Tax reads " We'll handle your cash liquidation distribution from Schwab later.  Just remember to go to the Investment Income section under Wages and Income".  

There is nothing pertaining to the cash liquidation distribution amount under the "Investment Income" section.  I do not see a "Wages & Income" section". Is this old language?

I see the cash liquidation distribution on the 1099-Div in box 9.  

I see the same amount in Turbo Tax in the Personal Income tab, under the "Interest and Dividends" section under the subheading "Dividends on 1099-DIV". How do I make sure the cost basis is correct?  There was a $600 gain on the investment but I do not see that figure listed anywhere.  

Thank you 

[RobertB4444]

In the 'Income' section of your federal return scroll down to 'Investment Income'.  The first line there is "Stocks, Bonds, Cryptocurrency, Other".  Click 'start' or 'update' next to that.

The cash liquidation amount from box 9 should be there on a list.  Click 'edit' next to it and you'll be able to enter the basis.

If it is not listed there then click 'Other' as the type of investment and enter the information about the liquidation distribution.  Then go back and delete it from the 1099-DIV where it was originally entered.

@Rosmakloma