Welcome back! Ask questions, get answers, and join our large community of tax professionals.
Showing results for 
Search instead for 
Did you mean: 

How do I enter 1099-DIV, Box 8 and Box 9 Information?

Intuit Help

How do I enter 1099-DIV, Box 8 and Box 9 Information?

The cash and non-cash liquidation distributions are generated when a corporation is partially or completely liquidated, and represent a return in capital investment. This amount should be treated as capital gain to the extent that it exceeds the initial basis of the investment. Basis of the investment must be tracked by the taxpayer.
Currently ProConnect Tax Online does not have a specific input field for 1099-DIV boxes 8 and 9.
To enter 1099-DIV boxes 8 and 9:
  1. Go to second Income>Schedule D/4797/etc to enter the transaction.
  2. Click the Details button to expand the input.
  3. Enter the amount shown in Box 8 or Box Box 9 as the Sales Price.
  4. Enter the known basis amount as the Cost or Basis.
  5. Enter the date of the basis investment if known in Date Acquired, or enter a negative date for Various.
  6. Enter the date the corporation was liquidated as Date Sold, or enter negative date for Various.
    •  If necessary, use the 1 = short term, 2 = long term [O] in the "1=short-term, 2=long-term [Override]" field.

The IRS provides this guidance to aid the Preparer in entering this information. It comes from Pub 550, pages 21, 22

Liquidating Distributions

Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. These distributions are, at least in part, one form of a return of capital. They may be paid in one or more installments. You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Any liquidating distribution you receive is not taxable to you until you have recovered the basis of your stock. After the basis of your stock has been reduced to zero, you must report the liquidating distribution as a capital gain. Whether you report the gain as a long-term or short-term capital gain depends on how long you have held the stock. See Holding Period in chapter 4.

Stock acquired at different times.

If you acquired stock in the same corporation in more than one transaction, you own more than one block of stock in the corporation. If you receive distributions from the corporation in complete liquidation, you must divide the distribution among the blocks of stock you own in the following proportion: the number of shares in that block over the total number of shares you own. Divide distributions in partial liquidation among that part of the stock that is redeemed in the partial liquidation. After the basis of a block of stock is reduced to zero, you must report the part of any later distribution for that block as a capital gain.

Distributions less than basis.

If the total liquidating distributions you receive are less than the basis of your stock, you may have a capital loss. You can report a capital loss only after you have received the final distribution in liquidation that results in the redemption or cancellation of the stock. Whether you report the loss as a long-term or short-term capital loss depends on how long you held the stock. See Holding Period in chapter 4.

Was this helpful?

You must sign in to vote, reply, or post
Labels (1)