Cash Liquidation Distribution

[lachance98]

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?

[MarilynG1]

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 

[lachance98]

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

[DaveF1006]

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.

1. Go to Wages & Income
2. Scroll to Investments and Savings
3. Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
4. Time to kick off your investments! = Okay
5. Time to kick off your investments! = Continue
6. Let's import your tax info = Enter a different way
7. There are five boxes available
8. Interest
9. Dividends
10. Stocks, Bonds, Mutual Funds
11. Cryptocurrency
12. Other
13. You will select Stocks, Bonds, Mutual Funds
14. You will then go through an interview process to describe the sale.

You will have to have information about

• How you acquired the asset. (Purchased, gift, etc.)
• Is it Long/Short term
• It was not reported to IRS
• The basis of your stock (this is your original investment)
• Date of sale
• Proceeds (Liquidation amount).
• Purchase date
• Purchase price

@lachance98 

[lachance98]

Thank you very much, that is helpful.  I'm now getting a question on 'How do you plan on submitting your 1099-B to the IRS?' even though I marked the entry as Long-Term Did Not Receive a 1099-B.  Is there anything else I need to do since I did not receive a 1099-B?

[DawnC]

Do you have anything else listed in the investments section beside the liquidating distribution?    If this is your only investment sale, you entered the transaction as a summary instead of individually.    If you choose to enter summary data, you must attach a 1099-B, which you don't have.   So, delete the 1099-B transaction you previously entered and re-enter the same info, except this time, choose the option to enter sales one at a time.   Once you do that, the request for the 1099-B upload will go away.   You can't edit to fix it, you have to delete your summary entry and re-enter it as one individual sale.