"My 1099-B gives me the totals of a Cash Liquidation as proceeds from Broker and Barter Exchange Transactions. How is a cost basis for a cash liquidation figured?

[olsontd]

Box 1e is left blank. Is a cash liquidation different from a stock sale in terms of figuring a cost basis?

[CarolC]

Yes, the basis may be different than your stock purchase basis.  Often, when there is a cash liquidation, some type of merger or other stock activity has taken place.  To get an absolute answer, you will need to visit the Investor Relations webpage for the stock that paid a cash liquidation to you.  Usually, the stock company will provide tax guidance on how to report the basis for the transaction that has taken place.

If the cash liquidation you received is a minimal amount and you don't want to go through the effort to research this, you can enter zero for your basis.  If your income is low enough, then this may end up being a nontaxable event.

However, if your cash liquidation is significant, and your tax bracket is above 15%, then you will want to make the effort in researching your correct cost basis information.