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Form 1099 liquidating dividend

form 1099 liquidating dividend-66

This nets you a little more stock each time, so that, ultimately, you end up with more shares than you started with.

form 1099 liquidating dividend-78form 1099 liquidating dividend-21

Simply put, instead of receiving $3.24 in dividends, the company automatically purchases for you however many shares (or portions of a share) that $3.24 will buy.Q: What are the tax implications for Box 8, Cash Liquidation Distributions for Taxable Accounts (such as individual or joint tenant type accounts)?A: A Cash Liquidation Distribution is a non-taxable distribution until such time that the total Cash Liquidation Distributions received exceed the cost basis of the investment.This document splits out the types of dividends you received as follows: In general, taxes on dividends are pretty simple.Most tax preparation software programs ask you to input the information from your 1099-DIV, and then proceed to make the necessary calculations for you and record them on the appropriate tax forms.Hold onto the quarterly statements you receive, which reflect how many shares were bought, at what price, and on which day the investment was made. Some software programs and most brokers also keep track of this for you.

The 1099-DIV is the tax form that you receive from each company that sends you dividends (or with whom you’ve started a DRIP plan) if it paid you $10 or more in dividends or withheld any taxes from your dividends (or if the company was liquidated and you received a liquidating distribution).

Depending upon how you receive dividends, you may need to plan ahead for tax day.

Specifically, it is important to understand the different types of dividends, what you can expect as far as paying taxes on them, and how to read the 1099-DIV tax form so you’re adequately prepared.

Q: Was the initial liquidating distribution of $6.20 per share the final liquidation of my investment?

A: No, in addition to the initial liquidating distribution, we expect to make one or more additional liquidating distributions in First Quarter 2017.

Q: How will the initial liquidating distribution be reported for tax purposes?