Are “cash liquidation distributions) as shown on a 1099-DIV (box 8) taxable income?
Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. These distributions are one form of a return of capital. You will receive a Form 1099-DIV from the corporation showing the amount of the liquidating distribution in box 8 or 9. Partial liquidating distributions are not taxable income as long as you still have a cost basis in your original investment, they are used to reduce that basis. If and when distributions exceeds your cost basis, the excess is a capital gain. If, when the distributions are ended and the corporation has been completely liquidated, the distributions were less than your basis, the difference is a capital loss.
