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Amended 1099's
It appears we are getting to the point in the year where some of you are receiving amended 1099 forms. Many times these show that an amount previously classified as a dividend is now being classified as a "non-dividend distribution" Usually this is a Return of Capital.

Why do you get these?

Companies are only allowed to classify distributions as dividends if they have a certain amount of "Earnings and Profits" This is a tax term. It is calculated slightly differently than the GAAP earnings amounts you get on financial reports. A company does not know if it has met the threshold until it closes and audits its books at the end of its fiscal year. This can take a while, which is why you sometimes receive amended 1099's after February 15. Often these are from companies whose finances are a bit more shaky. If you follow the company closely, you should have an inkling this might be a possibility.

If a distribution is not a dividend, it is not a distribution of earnings, but rather a return of some of your investment in the company. That is why a Return of Capital distribution lowers your tax basis in your shares.

If you do get information where dividends have been reclassified as a return of capital, you need to edit your dividend entry in bivio and change it to a return of capital. If only part of your dividend has been reclassified, you might have to split each original entry into two. If you've already filed taxes claiming the income as a dividend, you'll need to file an amended return to report it correctly.


Laurie Frederiksen
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Thank you for all your help.  I just assumed the amended 1099 would just flow into Bivio. 

I do understand return of capital.  I have tried splitting it into two pieces but still can't get it to come off the stock.  So far all I have been able to do is get it to be nontaxable.  If I play with it long enough I'll probably get it to come out right---hopefully. 

We took a flier on a small stock and only have the one as a spec.  So far we are quite profitable on it.

Again, thanks for the help.


Date: Wed, 13 Mar 2013 13:31:01 -0400
From: laurie@bivio.biz
Subject: [club_cafe] Amended 1099's
To: club_cafe@bivio.com

It appears we are getting to the point in the year where some of you are receiving amended 1099 forms.  Many times these show that an amount previously classified as a dividend is now being classified as a "non-dividend distribution"  Usually this is a Return of Capital.

Why do you get these?

Companies are only allowed to classify distributions as dividends if they have a certain amount of "Earnings and Profits"  This is a tax term.   It is calculated slightly differently than the GAAP earnings amounts you get on financial reports.   A company does not know if it has met the threshold until it closes and audits its books at the end of its fiscal year.  This can take a while, which is why you sometimes receive amended 1099's after February 15.  Often these are from companies whose finances are a bit more shaky.  If you follow the company closely,  you should have an inkling this might be a possibility.

If a distribution is not a dividend, it is not a distribution of earnings, but rather a return of some of your investment in the company.   That is why a Return of Capital distribution lowers your tax basis in your shares.

If you do get information where dividends have been reclassified as a return of capital, you need to edit your dividend entry in bivio and change it to a return of capital. If only part of your dividend has been reclassified, you might have to split each original entry into two.   If you've already filed taxes claiming the income as a dividend, you'll need to file an amended return to report it correctly.


Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend!  www.facebook.com/bivio
Follow us on twitter!  www.twitter.com/bivio
Follow Us on Google+


Click here to
Subscribe to the Club Cafe email list.  Click here to  Unsubscribe
If you want to email us at support@bivio.com we can look at your entries and make sure they are correct. Return of capital will not show up on your tax filing anywhere. It just reduces the basis of a stock.

Laurie Frederiksen
Invest with your friends!
www.bivio.com

Become our Facebook friend! www.facebook.com/bivio
Follow us on twitter! www.twitter.com/bivio
Follow Us on Google+


Click here to
Subscribe to the Club Cafe email list. Click here to Unsubscribe


On Thu, Mar 14, 2013 at 12:42 AM, TJ HARDIE wrote:


I do understand return of capital. I have tried splitting it into two pieces but still can't get it to come off the stock. So far all I have been able to do is get it to be nontaxable. If I play with it long enough I'll probably get it to come out right---hopefully.