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Subject:  Re: Non-Dividend Distribution Date:  3/3/2014  10:37 PM
Author:  irasmilo Number:  120342 of 132488

On my 1099-Div, I have Box 3 Non-Dividend Distributions. My broker says these are from 3 stocks - NVDA, KWG, FHCO. How do I confirm that these are indeed non-dividend distributions as opposed to regular dividends? I would hate to do my taxes and get a revised 1099-Div telling me these are regular dividends.

Box 3 entries are usually returns of capital. These often occur if the company doesn't have enough earnings to support the cash distributed as dividends. When you receive a non-dividend distribution, you reduce your cost basis in the shares you own. It doesn't get reported on your current income tax return, but will increase the gain (reduce the loss) reported when you sell the shares in question.

The best resource for determining that these are not going to be reclassified is the investor relations site at the company.

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