This is a re-post of an article about non-dividend distributions, in April 2015 published. Hopefully, I am early enough for people wondering about this topic on their 2015 taxes. Several the stocks which i own made what are called a non-dividend distributions in 2014. This was reported to me on Form 1099-DIV in package 3 (Nondividend distributions).
These distributions aren’t treated the same as ordinary (Box 1a) or experienced dividends (Box 1b). Which means this begs the relevant question what is a non-dividend distribution? The answer was found by me, on the website of 1 of the stocks that made a non -dividend distribution in 2014: Mattel, Inc. (Nasdaq: MAT).
A non-dividend distribution symbolizes a return of a portion of the shareholder’s original investment in the stock of the corporation. Someone who is a citizen of the United States owns one share of Company A, Inc. stock. 5.00 on his solitary talk about of stock. Assume that Company A, Inc. establishes that for U.S. 60% of the 2014 dividend should be treated as a non-dividend distribution and 40% should be treated as a dividend. 5.00 distribution as a dividend.
The portion of the distribution which is treated as a dividend for U.S. 2.00 of dividend income on his 2014 U.S. Federal Income Tax Return. The part of the distribution which is treated as a non-dividend distribution for U.S. ’s basis in his stock. 47.00. The decrease in basis should not be taxable in 2014 but may impact the quantity of …Continue reading