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Author: loopholes One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120780  
Subject: Re: new 1099 issued... Date: 9/10/2011 7:26 PM
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Also, bear in mind that cash treated as "return of capital" is not taxable to you when received (as dividends are) because it's treated as though you are recovering a portion of your original investment in the shares. Return of capital distributions, therefore, require you to reduce your tax basis in the investment by the return of capital amount. If you have already sold the investment and reported the related gain or loss on your 2009 or 2010 return, you will also have to amend the amount of gain or loss you reported, increasing gain or reducing loss by the amount of the return of capital distribution.
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