There's a tiny box that needs to be checked on the 1099-DIV screen. (See the attached screenshot below. Click to enlarge.)
First, how to get there; then a little info below on why Box 8 and 9 is usually not taxable.
1. With your tax return open, search for 1099-DIV or 1099DIV (lower-case works also) and then click or tap the "Jump to" link in your search results.
2. Answer Yes to Did you receive any dividend income?
3. Choose your bank or brokerage from the list to import your 1099-DIV and click/tap Continue or manually enter your 1099-DIV by clicking/tapping I'll type it in myself.
4. Follow the on screen instructions to enter your 1099-DIV.
Don't combine the amounts from 2 or more 1099-DIV forms if they're from the same payer. Instead, enter additional 1099-DIVs individually by answering Yes to Do you have any more dividend income from somewhere else which appears a few screens down the road.
If you are entering a second 1099-DIV, simply click/tap on Add Another Broker or Payer and follow the same steps above.
You may not need to report this income, however fill in the 1099-DIV as written on the form.
Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. These distributions are, at least in part, one form of a return of capital. They may be paid in one or more installments. You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9.
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.
If the liquidating distribution shown in Box 8 or 9 is a complete liquidation, then report the amount in Box 8 or 9 on the stock sale screen as a stock sale. For example, if your cost basis in stock in a company is $1,000 and the company is totally liquidated, then if you receive a 1099-DIV with Box 8 showing $400 and you received nothing else from the liquidation, then you would report the stock as a sale on the stock sale screen and report $400 as the sales price and $1,000 as the cost basis in the stock that was completely liquidated.
I can't determine when this message was posted but there are a couple of statements in this post which may be misleading. A liquidating distribution can come from an S Corporation in which case a 1099-DIV is issued by the corporation. An S Corp does not issue a 1099-B as a broker does. The S Corp puts the liquidating distribution (sometimes called a dividend) in either Box 9 or Box 10 of the 1099-DIV depending on whether the distribution is in cash (Box 9) or in property (Box 10).
I posted the previous message and was replying to the original message in this thread which stated that Box 8 and Box 9 of the 1099-DIV were used. I see that my post was not linked to the original post. Sorry for the confusion.
Also, I should mention that a liquidating distribution is not taxable to an S Corp. It is taxable to the Shareholder if the distribution exceeds his basis in his stock. That would create a gain which is reportable on the Shareholder's Form 1040, Schedule D and on Form 8949.
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