Corrected 1099INT for 2016. Argh.

Apr 09, 2018 3 Replies
F

I just got an amended 1099int for 2016. Apparently they are reclassifying $494 from qualified dividend to nondividend distribution. My Federal tax goes down $90 and state $35.



Do I amend 2016 exactly the same way I just amended my 2017?



What would happen if I ignore this? Yeah, $125 is something, but not sure it is worth the hassle. Would they just pay me like they would bill me if my taxes went up and I ignored it?



========================================= MODERATOR'S COMMENT: I would amend, I would not think IRS will cut you a check unless you amend,


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F

I was hoping for a bit more replies, but I guess it is tax time. My son got something similar today. He will get $9 Fed and $2 NY.

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B

Best to amend as IRS computers will kick out a letter with accrued interest.

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L

And while you're thinking (if you still are) about whether or not to amend for just a few dollars of tax (federal and state), remember that because the reclassified payment is now a "nondividend distribution" - a return of capital - you now have to reduce your tax basis in the underlying stock [or whatever it is] by $494, and you'll be expected to pay tax on that basis reduction when you sell the stock [or whatever it is].

Dontcha wish this had been for a few thousand dollars...or maybe even more?

Was that an amended 1099-INT or 1099-DIV you received for 2016?

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