Non-dividend distribution for shares no longer owned

TP sold a stock position late in December 2008 and reported the long- term capital loss on 2008 Schedule D.

2009 1099-DIV shows an amount for the stock in Box 1a (non-qualified dividends) and another amount for the stock in Box 3 (non-dividend distributions, return of capital).

There was a dividend in 2009 from having owned the stock late in

2008.

The question is how to report the Box 3 amount.

Ordinarily, it would be subtracted from the basis, so the impact would happen when the position is sold. In this case, no position was owned any time after 2008.

Is this considered a ?Nondividend Distribution Exceeding Basis? (pub

550 page 25)?
Reply to
zvkmpw
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Yes. Report as gain on Sch D, long or short term as applicable.

Reply to
Arthur Kamlet

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