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How to enter a non-dividend distribution

I received a non-dividend distribution which reduces the cost basis of the security that I bought. What is the best way to enter the transaction to reduce the cost basis?

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Accepted answers

J_Mike

What you have described is a Return of Capital transaction.

I would go back to the original Dividend transaction in the register and edit to change it to a Return of Capital.

All comments

The category for the downloaded transaction from the brokerage came in as a dividend, however, the 1099 reported it as a 'Non-dividend Distribution'. A dividend would be taxable but the distribution is not and is used to reduce my cost basis and thus increase the capital gain. What is the best way to modify this transaction so that my cost basis reflects this return of capital?

J_Mike

What you have described is a Return of Capital transaction.

I would go back to the original Dividend transaction in the register and edit to change it to a Return of Capital.

Thank you, problem solved.

williamswanson7

Entered non-dividend distribution as described here as a RtnCap, but Tax Summary report is showing under _DivInc. Any way to keep it from showing as taxable on Sch B other than changing manually in tax program used?

q_lurker

@williamswanson7 I have sometimes seen that changing a transaction (like from Div to RtrnCap) does not always clear the info in all places. You might need to delete the original transaction and then enter a new RtrnCap transaction. I can't say that RtrnCap is always treated correctly in all modules of Quicken, since I don't use all such modules. I don't recall seeing my normal RtrnCap entries in Tax Summary Reports.

nhttip

Just searching for this as I was doing my taxes, This was perfect thank you

Chris_QPW

My way to handle this is to ignore it in Quicken. Why?

I have a dividend paying security that also gets a fair amount of "return of capital". The problem is that there is no way to know which is which during the year. Not only is it not downloaded like that, even on Chase's website is it separated out, it is all just "dividends".

It isn't until I get the 1099 that I can see them separated.

nhttip

https://community.quicken.com/discussion/comment/20416866#Comment_20416866

true, I only noticed it on my 1099 and it was only one transaction so I went back and corrected it. But as you say it doesn't download like that and if you weren't paying attention to the 1099 you would never see it. I guess I just have OCD about balancing Quicken to my tax forms :)

Chris_QPW

https://community.quicken.com/discussion/comment/20417045#Comment_20417045

I noticed it, but the security I have pays dividends every month. When I get my 1099 (which I wish Chase would hurry up and send. 😉 ) I will have only one number for the return on capital. I guess I could divide it by 12 and change each transaction, but it isn't worth it to me, and it wouldn't be 100% correct anyways as I have continued to buy shares so the dividends/return on capital isn't 1/12 per month.