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Question

How do I enter a 1099-div where the only entry is a cash liquidation distribution?

Forum|Forum|4 years ago
April 13, 2022
1 reply
0 views

Can I ignore this and not report it because it is not taxable and will only act to reduce my basis?

TurboTax Premier Online

Yes, you do not have to report this. A return of principal is not a taxable transaction. A Box 3 amount on Form 1099-DIV comes from nondividend distributions and reduce your basis in the stock. You may leave them off your tax return entirely as long as you still have a basis in the underlying stock.

When you sell the stock in the future, your cost basis will be reduced because of the return of principal which means your gain will be larger (or loss smaller) on the sale.