Quote Originally Posted by BHoffman View Post
The reason for taxing excess distributions as capital gains is the assumption that the shareholder has actually sold a portion of his stock. That transaction would not result in an increase to his basis.
Thank you for your input. The increase in basis did not make sense to me and I could find nothing that backed it up, but wanted to make sure I was correct and not shorting my taxpayer.

Thank you again.

Peggy Sioux