$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.
E*Trade paid it all as ordinary, and didn't adjust my basis for it. I bought mine in an IRA, but that shouldn't change the way it's tracked, if it's supposed to have a reduced basis, in case something happens to change the holding's status before I start collecting normal payments.
Scottrade. When I noticed the cost basis had been reduced, I emailed them and the answer came back that $X amount was a Return of Capital. I emailed back saying, if that was the case, shouldn't that amount have been reported on Line 3 instead of 1a and 1b as Ordinary.Qualified Divs.
The answer back for that question was, yes, they are going to contact Wynn to make sure it really was a return of capital, and then issue a corrected 1099-DIV.
I'm not sure, but I think it might tie in with the transaction late last year where Wynn Las Vegas transferred $700 million in cash plus the gold course to Wynn Resorts (which is the stock company). That'd be about $7/share.
I don't know the ins and outs of that type of transaction, but if the special div was speculated to be paid in order to avoid higher div tax rates in 2013, then a Return of Capital transaction might be even more advantageous, because it lowers your basis, thus you end up paying the cap gains rate when you sell, rather than the div rate in 2012.
When/if I hear back from Scottrade, I'll post here.