Liquidating distribution tax treatment
Does Cash Liquidation Distribution in BOX 8 of 1099-DIV have to be reported?
This is the first time I have received a 1099-DIV with an entry in BOX 8. I understand that this is a partial return of capital, only reducing the cash basis of the sock, and could be there for informational purposes only. Thank you for giving me the opportunity to assist you.
If you bought more than one block of stock, you will need to figure it out based on the instructions provided.
However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.Partners can wind up paying tax on income they don’t receive.Basis increases with the partner’s share of income and contributions to the partnership.I will give the best answer that I can with the information provided.Publication 550 describes the tax treatment of this type of distribution.
So if a partner had a basis of $10,000 in the partnership and received a liquidating distribution of $3,000 cash and a plot of land worth $25,000 he would allocate his remaining $7,000 of basis to the land.