Solved

For the "How did you receive this investment" field, why isn't "Return of capital for fractional shares or cash in lieu" an option?

Forum|Forum|5 years ago
February 22, 2021
1 reply
0 views

I received cash for the shares I owned in the original company that then merged with another company.

TurboTax Premier Online

Best answer by DianeW777

Reporting this transaction is like reporting a sale of stock.

How to Report Cash in Lieu of Fractional Shares

The IRS considers cash for a fractional share to be money received as the result of a stock sale.
This transaction must be reported on IRS tax form Schedule D Capital Gains and Losses.
The date of the sale (when cash was received) and the date of the original stock purchase is needed to complete the tax form.

Tax Basis Example: Assume a shareholder has an aggregate $100 basis in 50 shares of ABC stock ($2 per share), and the fair market value of one share of ABC stock is $66.65. Following the ABC Merger, the shareholder should have an aggregate $100 basis in 64.1 shares of ABC stock (50 shares x 1.2820, or $1.56 per share), and should be treated as having sold 0.1 shares of ABC stock with a tax basis of $0.156 ($1.56 x 0.1 shares) for $6.67 ($66.65 per share fair market value x 0.1 fractional shares).

Once you have your information you will complete the entry in TurboTax using the following steps.

Open (continue) your return if it isn't already open.
In TurboTax, search (upper right) > Type 1099-B (include dash) Press enter > then select the Jump to link
Answer Yes to Did you sell stocks, mutual funds, bonds, or other investments in 2020?
- If you see Here's the info we have for these investment sales, select Add More Sales.
Answer NO to Did you get a 1099-B or brokerage statement for these sales? Or answer YES if you want to try to import it.
Follow the instructions.

D

DianeW777Answer

Reporting this transaction is like reporting a sale of stock.

How to Report Cash in Lieu of Fractional Shares

The IRS considers cash for a fractional share to be money received as the result of a stock sale.
This transaction must be reported on IRS tax form Schedule D Capital Gains and Losses.
The date of the sale (when cash was received) and the date of the original stock purchase is needed to complete the tax form.

Tax Basis Example: Assume a shareholder has an aggregate $100 basis in 50 shares of ABC stock ($2 per share), and the fair market value of one share of ABC stock is $66.65. Following the ABC Merger, the shareholder should have an aggregate $100 basis in 64.1 shares of ABC stock (50 shares x 1.2820, or $1.56 per share), and should be treated as having sold 0.1 shares of ABC stock with a tax basis of $0.156 ($1.56 x 0.1 shares) for $6.67 ($66.65 per share fair market value x 0.1 fractional shares).

Once you have your information you will complete the entry in TurboTax using the following steps.

Open (continue) your return if it isn't already open.
In TurboTax, search (upper right) > Type 1099-B (include dash) Press enter > then select the Jump to link
Answer Yes to Did you sell stocks, mutual funds, bonds, or other investments in 2020?
- If you see Here's the info we have for these investment sales, select Add More Sales.
Answer NO to Did you get a 1099-B or brokerage statement for these sales? Or answer YES if you want to try to import it.
Follow the instructions.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

B

Browniela

Having the same issue after import. Directions in "Learn more" state there should be an option available for "Return of Capital...." but it is missing from the drop down menu. This is a programming error. How do we get support to have an Engineer correctly display drop down menus?

Also seeing horrible formatting to filling in gaps if you have a brokerage firm with X number of sales. You cannot edit the correct information with an overlay showing up on the screen. So much money spent to have pop ups to pay more to have "live help" almost forcing people to no longer use Turbo Tax because the product is broken.

D

DianeW777

Reporting this transaction is like reporting a sale of stock. Please use the information below to help you complete your tax return.

How to Report Cash in Lieu of Fractional Shares

The IRS considers cash for a fractional share to be money received as the result of a stock sale.
This transaction must be reported on IRS tax form Schedule D Capital Gains and Losses.
The date of the sale (when cash was received) and the date of the original stock purchase is needed to complete the tax form.

Tax Basis Example: Assume a shareholder has an aggregate $100 basis in 50 shares of ABC stock ($2 per share), and the fair market value of one share of ABC stock is $66.65. Following the ABC Merger, the shareholder should have an aggregate $100 basis in 64.1 shares of ABC stock (50 shares x 1.2820, or $1.56 per share), and should be treated as having sold 0.1 shares of ABC stock with a tax basis of $0.156 ($1.56 x 0.1 shares) for $6.67 ($66.65 per share fair market value x 0.1 fractional shares).

Once you have your information you will complete the entry in TurboTax using the following steps.

Open (continue) your return if it isn't already open.
In TurboTax, search (upper right) > Type 1099-B (include dash) Press enter > then select the Jump to link
Answer Yes to Did you sell stocks, mutual funds, bonds, or other investments in 2020?
- If you see Here's the info we have for these investment sales, select Add More Sales.
Answer NO to Did you get a 1099-B or brokerage statement for these sales? Or answer YES if you want to try to import it.
Follow the instructions.