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Wynn Resorts Ltd. Message Board

  • chummy10001 chummy10001 Feb 26, 2013 5:21 PM Flag

    $6.28 of the Nov 2012 Special Div was Return of Capital

    I noticed that the cost basis of the WYNN shares I bought last summer had been reduced, so I contacted my broker and they said that $6.2816 of the special dividend paid last November was considered Return of Capital.

    The broker had reported all of it as ordinary/qualified divs on lines 1a and 1b of my 1099-DIV. It should have been on line 3.

    I recommend checking your 1099-DIV to see how this was reported, and check the cost basis your broker is currently calculating.

    If you are in the 15% or lower marginal tax bracket, qualified divs were taxed at 0% in 2012, so this type of error won't make any difference in your federal tax due.

    But if you're in a higher than 15% tax bracket, you will end up paying tax twice - once if the amount was reported as ordinary/qualified div, and again when you sell because your cost basis was reduced.

    It may also affect your state tax; in my state, there's no threshold where ordinary/qualified divs are not taxed, so having it on the wrong line on my 1099-DIV would have cost me extra state tax if I hadn't noticed.

 
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