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You can consider a "Cash Liquidation Distribution" as similar to a a Return of Capital. That is, in your own records you reduce the basis of the stock that paid the distribution. If cumulative distributions of this sort drive the basis "below" $0 at that point you'd report the "negative basis" amount as proceeds against a basis of $0 on Form 8949, creating a capital gain that would flow to Schedule D.
Tom Young
You can consider a "Cash Liquidation Distribution" as similar to a a Return of Capital. That is, in your own records you reduce the basis of the stock that paid the distribution. If cumulative distributions of this sort drive the basis "below" $0 at that point you'd report the "negative basis" amount as proceeds against a basis of $0 on Form 8949, creating a capital gain that would flow to Schedule D.
Tom Young
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