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In 2016, a privately-held company in which I owned shares was partially (irrelevant, I think) bought out by a private equity firm. We paid capital gains tax on the amount received in 2016 (minus that percentage of our basis).

A small amount was held back from the initial sale to cover contingencies. This fund, less whatever was taken out for unanticipated expenses after the takeover, was distributed in 2017. What is the correct treatment? An additional capital gain with zero basis?

This was not an installment sale, as the extra distribution could easily have been zero.

  • Was the privately-held company in the US? If so, I would have thought they would issue you with the appropriate information. – Peter K. Mar 6 '18 at 13:24
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    Yes, USA, maybe I should ask them. – Andrew Lazarus Mar 6 '18 at 16:35

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