>>You do agree, don't you, that none of those dire things are going to
happen if they just call the whole thing non-qualified dividends.

Yes, my comment was a bit of intentional overreaction. If the cash received actually was a dividend or even related to a taxable number and reported as nonqualifying dividends the IRS wouldn't care -- but it isn't. It's only a cash distribution of unknown nature until the K-1 arrives. It should be recorded as a return of capital until such time as more information is provided by Pengrowth. 

>>As for the note from Pengrowth, I would say 'interesting', but so what.
Probably most of the brokerage firms are not going to comply. If it were
I as treasurer, I would take the path of least resistance, and get the
return filed and the partners off my back.

Pengrowth agrees that many brokerages won't correct the 1099's. But that doesn't change the more important issue that the cash distributions from Pengrowth bear no relationship to the reportable income from Pengrowth. That can only be determined from the K-1 which will be issued.

 

Ira Smilovitz