Report nondividend distributions (box 3 of Form 1099-DIV) only after your basis in the stock has been reduced to zero. After the basis of your stock has been reduced to zero, you must show this amount on Schedule D, Part I, line 1, if you held the stock 1 year or less. Show it on Schedule D, Part II, line 8, if you held the stock for more than 1 year. Enter “Nondividend Distribution Exceeding Basis” in column (a) of Schedule D and the name of the company. Report your gain in column

(f). Your gain is the amount of the distribution that is more than your basis in the stock.