Which exclusion percentage do you see on your statement? My 1099-div has 0.00 in everything but the 1a which is 25.81 in dividends. Am I 50%? 60%? 75%? or 100%?

The exclusion percentage question comes up if you have an entry in Box 2c of Form 1099-DIV.

 

 If it's zero, delete the entry because that code section does not apply.

 

Internal Revenue Code section 1202 says a portion of the gain from sale of Qualified Small Business Stock (QSBS) reported on 2c is excludable if the stock was held more than 5 years.

 

If your Dividend Income included a capital gain distribution for qualified small business stock—RICs, a portion of the gain may be excluded under certain circumstances. 

 

The payer of the 1099-DIV should have provided additional information if this applies:

 

• Under section 1202, a 50% exclusion may be allowed on the gain from the sale or exchange of qualified small business stock issued after August 10, 1993, and held for more than 5 years. 
• A 60% exclusion may be allowed if the stock is empowerment zone business stock acquired after December 21, 2000, but not on gain attributable to periods after December 31, 2018. 
• For qualified small business stock acquired after February 17, 2009, and before September 28, 2010, the exclusion is 75%. 
• For qualified small business stock acquired after September 27, 2010, and before January 1, 2014, the exclusion is 100%. 
• For purposes of the 75% and 100% exclusions, the acquisition date shall be the first day on which the stock was held by the taxpayer determined after the application of section 1223.

 

If any part of the capital gain distribution reported in box 2a may qualify for this exclusion (taking into consideration the recipient's holding period), the payer should report the gain in box 2c, and furnish you with a statement that reports separately for each designated section 1202 gain the:

 

• Name of the corporation that issued the stock that was sold,
• Date(s) on which the RIC acquired the stock,
• Date sold,
• Recipient's part of the sales price,
• Recipient's part of the RIC's basis in the stock, and
• Amount of the recipient's section 1202 gain and the exclusion percentage.

If this is the situation and you don't have the additional information needed to select an exclusion percentage, contact the payer.

 

See the IRS instructions for Form 1099-DIV for more information.