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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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How to report an escrow distrubution of stock in a bankruptcy proceeding

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IN 2006 I reported the loss on the stock of a corporation in a bankruptcy proceeding. In 2008 I received a 1099-B in the amount of $6.56 from the distribution of the escrowed stock. How can I report this 1099-B which I received in 2008 and its $6.56 income(?). The entire loss from the stock was included in my 2006 tax return because the loss was reported to me by my broker in that year. The broker simply reported the loss to me but did not send me a 1099-B or any other IRS Form.

You will report this amount of $6.56 as income in 2008. Generally fractional sale or cash in lieu is reported by the broker on Form 1099B.

You will report this on Sch D as Sale proceeds with zero cost basis as thestock was already disposed off earlier.


Let me know if you have any question.


Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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