Common questions about dividend income in Lacerte

In this article, you'll find answers to frequently asked questions about dividend income:

Table of contents:

Entering dividend income from Form 1099-DIV

To enter dividend income in Lacerte, go to Screen 12, Dividend Income (Schedule B). Enter the payer name, ordinary dividends, qualified dividends, and any foreign tax paid as they appear on Form 1099-DIV. The entries will automatically flow to Form 1040, Schedule B, and Form 1116 if foreign taxes were withheld. If the taxpayer received multiple 1099-DIVs, you can use the [Ctrl]+[E] detail entry to list each payer separately.

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Entering 1099-DIV box 9 and box 10 amounts

Boxes 9 and 10 on Form 1099-DIV represent cash liquidation and noncash liquidation distributions. Lacerte doesn’t have a direct input field for these boxes. Instead, enter the amounts on Screen 17, Dispositions using:

• Sales price (code 27) for the cash liquidation amount, and
• Cost or basis (code 29) for the adjusted basis.

This ensures the gain or loss flows to Form 8949 and Schedule D as required. Refer to IRS Publication 550 for more information on liquidation distributions.

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Entering 1099-DIV box 10 amounts

Box 10 reports exempt-interest dividends, typically from mutual funds or regulated investment companies. In Lacerte, enter these amounts on Screen 12, Dividend Income under the section Tax-exempt interest (1099-INT/1099-DIV) in the field Total municipal bonds. These amounts flow to Form 1040, line 2a and are excluded from taxable income but may still affect other calculations such as the Alternative Minimum Tax (AMT).

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Generating Form 1116 - Foreign Tax Credit

If the taxpayer paid foreign taxes on dividend income, Lacerte can generate Form 1116 automatically. Go to Screen 35, Foreign Tax Credit (1116) and select the appropriate income category (Passive, General, etc.). Enter the total foreign taxes paid as shown on Form 1099-DIV, Box 7. Lacerte will determine whether Form 1116 is required based on the foreign tax amount and the IRS thresholds. If the taxpayer qualifies to elect not to file Form 1116 (for taxes under $300/$600), check the corresponding box in Screen 35.

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Related Articles

• Entering dividend income from Form 1099-DIV in Lacerte
• Entering 1099-DIV box 9 and box 10 in Lacerte
• Entering 1099-DIV Box 10 in Lacerte
• Generating Form 1116 Foreign Tax Credit for an Individual return