Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.
Hello there, Publication 550 describes the tax treatment of this type of distribution. How you treat it depends upon whether this is a total payment or liquidation, or if it is part of an installment.
Basically, the distribution is not taxable up to the recovery of your basis in the stock. Once your basis is recovered, the remaining portion is taxable as capital gain. If you receive a total distribution that is less than your basis, you will have a capital loss. If you bought more than one block of stock, you will need to figure it out based on the instructions provided.
If there is no capital gain or loss(distribution and basis the same), you do not need to report it but you may choose to, by listing it on Schedule D with no gain or loss.
Please see page 22 in the following publication under "liquidating distributions":
The distribution is from several companies, but I can't find the names.I am dealing with
a financial advisor representing a large investment company,and it is very hard to get
any info from them. On schedule D : DISCRIPTION OF PROPERTY - Various
DATES AQUIRED,SOLD I could leave blank.SALES PRICE and COST OR OTHER
BASIS , both entries could have the amount of the distribution. Please let me know if that looks O.K.
This is only a partial return of capital reducing the cost basis,but the companies are not
liquidating, and may be I coul enter "Various" fot the DATE SOLD also. Actually no stock is being sold. Could that be O.K.
I would proceed as described in the publication under "stock acquired at different times".
If you are sure that it is all return of capital, then proceed as you have mentioned, but I would not use "various" for date sold. I would use the date that the liquidation was done. You should have this somewhere on a statement or a check if you received cash.
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