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Interest and dividends

Nondividend distributions

A nondividend distribution is a distribution that's not paid out of the earnings and profits of a corporation. Any nondividend distribution is not taxable until the basis of the stock is recovered; however, a record needs to be maintained. After the basis of your stock is reduced to zero, the nondividend distribution will need to be reported as a capital gain.

Enter amounts from box 3

To maintain a record of the nondividend distributions received for the applicable tax year, use the
Record of nondividend and liquidating distributions
 statement window on the
Info
 screen in the
General
 folder.

Enter any taxable nondividend distributions

If any box 3 amounts are taxable:
  1. Go to the
    Income
     folder.
  2. Go to either the
    B&D
     screen or the
    Broker
     screen. Only use the
    Broker
     screen if you want to enter a consolidated 1099.
  3. Open the
    Schedule for detail
     statement and complete these fields:
    • Quantity sold / Stock/Other Symbol / Desc
      : Use the
      Quantity Sold
      ,
      Stock/Other Symbol
      , and
      Desc
       fields to describe the distribution. These fields will be combined into 1 field on the 8949.
    • Date Acq'd / Date Sold
      : Enter acquired and sold dates in the MM/DD/YY format.
    • Sales Price
      : Enter the total sales price of the nondividend distribution.
    • Cost/Basis
      : Enter the original cost or basis of the nondividend distribution.
    • Gain-Loss
      : The gain or loss for the sale automatically calculates based on the
      Sales Price
      ,
      Cost/Basis
      , and
      Adj to G/L
       entered.
  4. For fields that were skipped, complete them as needed for your client.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual
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