My 1099-div includes Box 3 (nondividend distribution) but nothing in boxes 1 or 2. My basis will go below 0, where do I report the capital gains?

Forum|Forum|4 years ago
March 13, 2022
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My understanding is that if the basis goes below 0 with returns of capital, then the excess should be reported as capital gains. Can I add information to boxes 1 and 2 to reflect this, or do I enter this elsewhere in turbotax?

TurboTax Premier Online

JohnB5677

You are correct. The amount of a non-dividend distribution is usually smaller than the investor's basis in the shares. In the rare case in which the distribution is more than the basis, the shareholder must reduce their cost basis to zero and report the excess amount of the distribution as a capital gain on IRS Form Schedule D.

To do this in TurboTax

Go to Wages & Income

Scroll to Investments and Savings
Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
Time to kick off your investments! = Okay
Time to kick off your investments! = Continue
Let's import your tax info = Enter a different way
There are five boxes available
1. Interest
2. Dividends
3. Stocks, Bonds, Mutual Funds
4. Cryptocurrency
5. Other
You will select Other

You will then go through an interview process to describe the excess distribution.

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pfgold

I have a stock non-dividend distribution that reduces my basis to less than zero so I have to report the excess as a capital gain. I attempted to follow the steps you outlined in your message but I was unable to find them. I am using the 2022 downloaded version of Turbotax for Home and Business.

GeorgeM777

Because you are using TurboTax Home & Business, follow these steps to enter the information regarding your non-dividend distribution.

Select the Personal tab.
Select the Personal Income tab.
On the next screen you will see the option to Walk me through everything, and the option to I'll choose what to work on. Select the latter.
Scroll down the screen to Interest and Dividends, and select the sub-topic Dividends on 1099-DIV.
On the next screen, you will see the option to import your 1099-DIV and the option to I'll type it in myself. Select the latter as it appears you are reporting one transaction.
On the next screen you will enter your information. When you check the box, My form has info in more than just these boxes, you will see more options, one of which will relate to non-dividend distributions.
Proceed to enter your information.