Cash Liquidation Distribution

Forum|Forum|2 years ago
March 6, 2024
5 replies
49 views

I have entered my 1099-DIV box 9 'Cash Liquidation Distributions' into Turbo Tax, only a portion of the amount is a capital gain. Turbo tax says that "We'll handle your cash liquidation distributions later" and to go back to Investment Income section under Wages & Income. I do not see anywhere in TurboTax Premium online to enter the amount of that 1099-DIV as a capital gain. Where/how do I record the portion of capital gain from the cash liquidation distributions?

Ask the Experts - MetLife III - Mar 2024

MarilynG

Level 15

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 amount 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.

Here's more info on Reporting Cash Liquidation Distribution.

@lachance98

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lachance98Author

Level 2

Where/how am I supposed to add it in the Investments and Savings section? That is my question.

DaveF1006

Level 15

The 1099 DIV is issued from stock that you own. You will enter the liquidating distribution in the return as if it is a stock sale. Any amount of the liquidating dividend that is in excess of your original investment will be treated as a capital gain.

You will enter the liquidation as if you were entering a 1099-B.