Tax Information for HGR Liquidating Trust
Formerly Hines Global REIT, Inc.
Historical Forms 1099-DIV
This schedule is being provided as a courtesy to assist shareholders in calculating the tax basis of their shares. Shareholders should consult their Forms 1099-DIV as provided previously for each year for dollar amounts, and shareholders should contact their tax advisors.
|HGR Liquidating Trust - Information Based on Historical Forms 1099-DIV||03/29/2020||Download xlsx|
Tax Implications of the Recent Liquidating Distributions1
The following Q&A and Cost Basis Calculator are designed to help you understand the tax implications of the liquidating distributions totaling $4.00 per share paid to shareholders and any remaining liquidating distributions. Please note that this information is provided for illustrative purposes only and to help give you a general understanding of the consequences of the recent liquidating distributions. We are not providing legal or tax advice. Shareholders should contact their tax advisors for specifics regarding the taxation of their individual investments. The questions and answers are based on certain assumptions that may not be accurate.
1. Q: How will liquidating distributions be reported for tax purposes?
A: The liquidating distributions received in 2019, will be reported to shareholders on their 2019 Form 1099-DIV. The liquidating distributions will be included in Box 9, “Cash Liquidation Distributions” on the 2019 1099-DIV which we expect to be mailed on or before January 31, 2019.
2. Q: What are the tax implications for Box 9, “Cash Liquidation Distributions” for Taxable Accounts (such as individual or joint tenant type accounts)?
A: A Cash Liquidation Distribution is a non-taxable distribution until such time that the total Cash Liquidation Distributions received exceed the cost basis of the investment. If the Cash Liquidation Distributions exceed the cost basis, the portion of the Cash Liquidation Distributions that exceeds basis is considered a capital gain and taxed accordingly. Whether you report the gain as a long-term or short-term capital gain depends on how long you have held the stock.
- If the Cash Liquidation Distributions do not exceed the cost basis, then the full amount of the Cash Liquidation Distributions will be non-taxable.
- Even if the Cash Liquidation Distributions do not exceed the cost basis, a loss cannot be recognized until the final liquidating distribution has been made and the account has been fully liquidated, which is not expected to occur until later in 2020.
3. Q: What are the tax implications for Box 9, “Cash Liquidation Distributions” for Non-Taxable Accounts (such as IRAs)?
A: As long as the cash remains within the Qualified Account and is not distributed out of the Qualified account, receipt of Cash Liquidation Distributions by such an account generally will not have any immediate tax implications.
4. Q: How do I calculate the cost basis of the investment?A: Use the calculator below, or take the following steps to make the calculation:
- Step 1: Use the total cost of the shares, including any costs of purchase such as commissions and fees. (The cost of any shares received pursuant to the dividend reinvestment plan is equal to their value on the date of receipt.)
- Step 2: Reduce the total from Step 1 by all Nondividend Distributions (Box 3 on Form 1099-DIV) reported while you owned the shares, as well as all Cash Liquidation Distributions (Box 9 on Form 1099-DIV).
According to IRS pronouncements, including IRS Publication 550 (excerpts of which are reproduced below), the calculations should generally be computed separately for each block of shares owned by a taxpayer (i.e., shares acquired in multiple transactions at different times), although use of an average cost across multiple blocks of stock is permitted in certain cases. If you need assistance locating the documents or amounts required for Steps 1 and 2 above, please contact Hines Investor Services at 888.220.6121.
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