{"id":20626,"date":"2017-06-14T12:00:00","date_gmt":"2017-06-14T12:00:00","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/"},"modified":"2023-08-29T08:32:12","modified_gmt":"2023-08-29T13:32:12","slug":"nondividend-distributions","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/income\/investments\/nondividend-distributions\/","title":{"rendered":"Nondividend Distributions"},"content":{"rendered":"

\"investments\"Dividends are a share of corporate or mutual fund profits paid out to shareholders. While most dividend distributions are taxable (some at lower rates than others), sometimes a portion of a distribution to shareholders is a nontaxable return of capital. These are also called nondividend distributions.<\/p>\n

What are Nontaxable Distributions<\/h2>\n

Nontaxable distributions are payments that are a return of capital. This means that the shareholder\u2019s original investment is being returned to the shareholder. These payments are not paid from the corporation\u2019s earnings and profits. These distributions reduce your basis in the stock or mutual fund and aren\u2019t taxed until the investor\u2019s basis is reduced to zero.<\/p>\n

Form 1099-DIV Box 3<\/h2>\n

You can find your nontaxable distributions on Form 1099-DIV<\/a>, Box 3. They\u2019re uncommon.<\/p>\n

How to Calculate Nondividend Distributions<\/h2>\n

Reduce your basis in your investment by the amount of your nontaxable distribution. Once you recover your full basis, report distributions as capital gains<\/a>. To learn more, see Publication 550: Investment Income and Expenses at www.irs.gov<\/a>.<\/p>\n

More Help with Taxes on Investment Income<\/h2>\n

Investment income poses special considerations come tax time, including special filing requirements and tax. Whether you make an appointment<\/a> with one of our knowledgeable tax pros or choose one of our online tax filing<\/a> products, you can count on H&R Block to help you get back the most money possible.<\/p>\n","protected":false},"excerpt":{"rendered":"

Dividends are a share of corporate or mutual fund profits paid out to shareholders. While most dividend distributions are taxable (some at lower rates than others), sometimes a portion of a distribution to shareholders is a nontaxable return of capital. These are also called nondividend distributions. What are Nontaxable Distributions Nontaxable distributions are payments that […]<\/p>\n","protected":false},"author":1,"featured_media":53733,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[24,47],"tags":[],"class_list":["post-20626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income","category-investments"],"acf":[],"yoast_head":"Nondividend Distributions | H&R Block<\/title>\n<meta name=\"description\" content=\"Learn more about nontaxable distributions, which should be reported on Form 1099-Div Box 3. 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