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Enter taxable liquidating distributions

To track liquidating distributions from a 1099-DIV, access the
Record of nondividend and liquidating distributions
 window on the
Info
 screen in the
General
 folder. Enter amounts from boxes 9 or 10.
Do the following to enter taxable liquidating distributions:
  1. In the
    Income
     folder, open the
    B&D
     screen or the
    Broker
     screen. Only use the
    Broker
     screen if you're entering a consolidated 1099.
  2. Open the
    Schedule for detail
     statement window and enter the following:
    1. Quantity sold
      ,
      Stock/Other Symbol
      , or
      Desc
      : Use these fields to describe the distribution. They’ll combine into 1 field on the 8949.
    2. Date Acq'd or Date Sold
      : Enter purchase and date sold in MMDDYY format.
    3. Sales Price
      : Enter the total sales price of the liquidating distributions.
    4. Cost/Basis
      : Enter the original cost or basis of the liquidating distributions.
    5. Gain-Loss
      : The gain or loss for the sale automatically calculates based on the
      Sales Price
      ,
      Cost/Basis
      , and
      Adj to G/L
       entered.
  3. For skipped fields, complete them as needed for your client.
    note
    Liquidating distributions (cash or noncash) are a form of a return of capital. Any liquidating distribution you receive isn't taxable to you until you recover the basis of your stock. After reducing your stock's basis to zero, you'll need to report the liquidating distribution as a capital gain on Schedule D. If the total liquidating distributions received are less than the basis of the stock, it generates a capital loss. Whether you report the gain or loss as a long-term or short-term capital gain or loss depends on how long you have held the stock.

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