In my 1099-DIV there is an amount in box 3 (Nontaxable distributions). It turns out this is a return of capital fron a bond mutual fund that I own. These distributions took place three times during the year.I know that these are not taxable dividends and that the return of capital (ROC) should be used to reduce the cost bases of the shares. But, since I have bought shares in many lots because of div. reinvestment, do I have to prorate the ROC across all shares? Or do I simply adjust the basis of the oldest shares?Thanks for any help you can offer. I couldn't find this topic in the Fool Tax Center.
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