1099 B Return of Capital

Forum|Forum|4 years ago
April 13, 2022
2 replies
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I have imported the 1099 B from my financial institution and I have now multiple entries in form 8949 that shows proceeds without cost basis. The original form calls all of those entries Return of Principal and my understanding is that it shouldn't be a taxable event. But how do I fix it in Turbotax? Should I delete all of those entries?

In the form 1099 B they show under "unknown term code X on form 8949", but turbotax apparently doesn't show this option and to the best of my knowledge doesn't have an entry for Return of Capital

What should I do?

taxfilingishardAuthor

Is there anybody who can point me in the right direction?

I am really lost on this issue

Thanks

ThomasM125

A return of capital usually means that you are receiving back the money you invested. If so, then your cost basis would be the same as your sale proceeds.

So, you would need to edit each investment sale and enter a cost basis equal to the sale proceeds. You will see an option for this after the form 1099-B entry:

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taxfilingishardAuthor

Thanks for helping out! I was leaning toward that solution but i was wondering if I was missing something and maybe TurboTax had some other way to handle this kind of securities (it is a number of FNMA pass thru MBS that were bought from my investing account).