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New Member
posted May 31, 2019 4:49:38 PM

Where are Non-Dividend Distributions (1099-Div, Box 3) reported on income tax return?

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1 Best answer
Level 15
May 31, 2019 4:49:40 PM

Non dividend distributions do not go anywhere on your actual tax return. Box 3 is for your information. Box 3 is a "return of capital". That is, you have been given back part of your original investment. As such, you reduce your cost basis, by the box 3 amount, in your own records, for when this investment (typically stock or mutual fund) is sold in the future.

4 Replies
Level 15
May 31, 2019 4:49:40 PM

Non dividend distributions do not go anywhere on your actual tax return. Box 3 is for your information. Box 3 is a "return of capital". That is, you have been given back part of your original investment. As such, you reduce your cost basis, by the box 3 amount, in your own records, for when this investment (typically stock or mutual fund) is sold in the future.

New Member
May 31, 2019 4:49:44 PM

The smartcheck says I need to enter an amount in box 1a or 2a or 10 to get through the check. How do I do that?

Returning Member
Oct 9, 2019 8:08:33 AM

So reporting as ordinary dividend was taxed once and the return of capital reduces the cost basis (= capital gain) which will be taxed again when you sell?

Level 15
Oct 9, 2019 9:24:19 AM

@wanghsiaochih 

If you mistakenly reported a non dividend distribution, as  ordinary income, in the past, and paid tax on it; then you do NOT reduce your cost basis, for the future sale.

 

Alternatively, you can file amended returns (going back not more than three years) and correctly report the  non dividend distribution. In that case, you would reduce your cost basis.  Either way, you will not be taxed twice.