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Old 08-07-2015, 07:32 AM
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Selling interest in a LP where I have rcvd nondividend distributions

I invested in a LP and received nondividend distributions, which weren't taxed. Now the company has gone public and I am selling my shares. The nondividend distributions have reduced my cost basis, so do I have to deduct the total of the nondividend distributions I received through the years from the cost of investing in the company when I report this?



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Old 08-07-2015, 09:51 PM
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I invested in a LP and received nondividend distributions, which weren't taxed. Now the company has gone public and I am selling my shares. The nondividend distributions have reduced my cost basis, ========>>>>>>>>>>>>>Correct; A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corp/LP or etc. A nondividend distribution reduces the basis of your shares. It is not taxed until your basis in the stock is fully recovered. This nontaxable portion is also called a return of capital; it is a return of your investment in the share of the LP. If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first.

so do I have to deduct the total of the nondividend distributions I received through the years from the cost of investing in the company when I report this?=====>>>>>>>>>>as said above; correct as the nondividend distributions that you received reduce your cost basis.



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