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If Client has non-cash Liquidating Distribution from a REIT, in Box 10 Form 1099, how do I know if it is taxable?

GPEARCE
Level 1
If taxpayer invested $20,000 five years ago  in a REIT and does not know the current basis of his account, how can basis be figured ?
Is a non cash liquidation in a REIT taxable?
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4 Replies 4
sjrcpa
Level 15

It's taxable to the extent it exceeds basis.


ex-AllStar
sjrcpa
Level 15

To compute basis, start with the $20K purchase price. Subtract all of the nondividend distributions received since then. Look at past 1099s.


ex-AllStar
R Taylor
Level 1

We have some of these this year too.  We have found that most REITS have a gain calculator on their website.  You need the original date, how much was invested and if the distributions were set to reinvest or not.  

Here is an example from the Black Creek Group.  

Industrial Property Trust | Black Creek Group

BobKamman
Level 14

The IRS answer would be:  Just assume basis is zero. 

When told that, most taxpayers are able to come up with something more accurate.