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Re: greasemonkeyshoes post# 2837

Friday, 01/31/2020 12:06:37 PM

Friday, January 31, 2020 12:06:37 PM

Post# of 3176
Tax treatment of LD(liquidating distribution) in a nutshell.......
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.

If it was a partial liquidation, there is nothing to report on your tax return. You adjust the cost basis of your stock or mutual fund by the amount of the partial liquidation shown in Box 8 or Box 9, then when you eventually sell the stock you will use the lowered cost basis as the purchase price of the stock.
Source:
https://ttlc.intuit.com/community/taxes/discussion/there-s-a-tiny-box-that-needs-to-be-checked-on-the-1099-d/01/134876#M56302
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