Nondividend distributions
A nondividend distribution is a distribution that's not paid out of the earnings and profits of a corporation. Any nondividend distribution is not taxable until the basis of the stock is recovered; however, a record needs to be maintained. After the basis of your stock is reduced to zero, the nondividend distribution will need to be reported as a capital gain.
Enter amounts from box 3
To maintain a record of the nondividend distributions received for the applicable tax year, use the
Record of nondividend and liquidating distributions
statement window on the Info
screen in the General
folder.Enter any taxable nondividend distributions
If any box 3 amounts are taxable:
- Go to theIncomefolder.
- Go to either theB&Dscreen or theBrokerscreen. Only use theBrokerscreen if you want to enter a consolidated 1099.
- Open theSchedule for detailstatement and complete these fields:
- Quantity sold / Stock/Other Symbol / Desc: Use theQuantity Sold,Stock/Other Symbol, andDescfields to describe the distribution. These fields will be combined into 1 field on the 8949.
- Date Acq'd / Date Sold: Enter acquired and sold dates in the MM/DD/YY format.
- Sales Price: Enter the total sales price of the nondividend distribution.
- Cost/Basis: Enter the original cost or basis of the nondividend distribution.
- Gain-Loss: The gain or loss for the sale automatically calculates based on theSales Price,Cost/Basis, andAdj to G/Lentered.
- For fields that were skipped, complete them as needed for your client.
