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How to enter Altaba Inc. (AABA) liquidating Dividend in Quicken?

Altaba Inc. (AABA) (was Yahoo) on 9/23/2019 distributed the 1st of several "liquidating dividends". Not sure how to enter in Quicken Premier.

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Answers

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Try "Return of Capital"
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    Now running Quicken Windows Subscription,  Home & Business
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  • Many thanks. I thought this might be the answer. And as this is only the first distribution from AABA guess this will be a high tax year. Bummer!
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Many thanks. I thought this might be the answer. And as this is only the first distribution from AABA guess this will be a high tax year. Bummer!
    I don't believe that Return of Capital transactions are taxable .... as they merely represent the return to you of your own money.  And CapGains have preferential treatment also.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Here's the key paragraph re: tax consequences:

    "In general, a non-U.S. stockholder will not be subject to U.S. federal income or withholding tax with respect to any gain realized on a liquidating distribution unless (1) the gain is effectively connected with the stockholder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment), or (2) in the case of a non-U.S. stockholder that is a nonresident alien individual, the stockholder is present in the United States for 183 or more days in the taxable year of the liquidating distribution and certain other requirements are met. A non-U.S. stockholder that holds Altaba common stock through an account with a U.S. financial institution or other withholding agent (such as a broker-dealer) should consult that institution regarding the U.S. withholding requirements."

    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    That paragraph applies to non-US stockholders. Is that the OP's situation?
    QWin Premier subscription
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited October 2019
    That paragraph applies to non-US stockholders. Is that the OP's situation?
    Good catch.  I grabbed the wrong paragraph. Here's the one for US citizens.


    A liquidating distribution received by a U.S. stockholder will first be applied against and reduce the stockholder’s adjusted tax basis in its Altaba common stock, before the stockholder recognizes any gain or loss. A U.S. stockholder will recognize gain as a result of a liquidating distribution to the extent that the aggregate value of the liquidating distribution and any prior liquidating distributions received by the stockholder with respect to a share exceeds the stockholder’s adjusted tax basis in the share. A U.S. stockholder generally cannot recognize a loss on a liquidating distribution until the final liquidating distribution is made, and then only if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder’s adjusted tax basis in the share. If a U.S. stockholder holds different blocks of Altaba common stock (generally as a result of having acquired shares at different times or at different prices), gain or loss is calculated separately with respect to each such block. Any gain or loss recognized by a U.S. stockholder will be capital gain or loss provided the stockholder holds its Altaba common stock as a capital asset.

    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Thanks all. Good information.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Many thanks. I thought this might be the answer. And as this is only the first distribution from AABA guess this will be a high tax year. Bummer!
    Let's try this with some rough numbers.  

    Stock was worth $70/sh just prior to liqudation announcement.  
    In October, stock paid initial $50 of liquidation amount.  Presumably there may be another $20 (remaining cash value less upcoming taxes and expenses) yet to come over the next couple of years.

    If you paid $60/share for your shares, the $50 initial liquidation amount would be non-taxable.  The next $10 would also be non-taxable.  Anything over that would be taxed at capital gains rates.

    If you paid $10/share, $10 of that initial $50 is non-taxable.  The next $40 received this year is taxable at cap gain rates.  Any distributions in future years would be similarly taxed at cap gains rates. 

    Maybe a bummer -- but only if it was a profitable investment.
  • In my case it was a profitable investment. So will pay taxes. Just wish there was no liquidation. Again thanks for the detailed information.
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