I have been informed that most of the dividend included in the 1099-DIV is actually a return of capital and therefore not taxable. How do I enter this info on my tax return?

I would be most grateful for any assistance.

#1;correct; roc is made out of original cpital that you invested. The distribution reduces the tax basis of the fund.assume that you hold a stock with a $100 basis. The investor receives a $40 return of capital dividend. The $40 dividend is not taxable income. You must reduce the basis of the stock to $60 dollars , I mean $100-$40 If you sell the stock for $90, the $30 profit , $90-$60, will be reported as a taxable gain and will be taxed as either aSTor LT gain depending on how long yu have held the stock.




#2;no you do not need to report it on your return. ROC is not a taxable transaction but lowers your cost basis by the amount of the ROC.

When you say: "you do not report it to the IRS", it does not solve my problem since it has already been reported as a regular dividend on a 1099-DIV. So if my number doesn't agree with what is on the 1099 I would assume I might hear from the IRS. The amount of money is not trivial, at least to me, and what I would like to know is how I can inform the IRS of why my number doesn't agree with what they have been furnished in this day of electronic submission.

roc are not considered income and are thus tax-exempt that is, until the returns of capital exceed the original investment. Roc, non-dividend distributions (box 3 of 1099-DIV), is not included on your tax return, but reduces your basis in your stock. I mean roc,nondividend distributions, do not affect your taxes or need to be reported.pleasecontact the irs for more info in detail