Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.