Is Deon required to keep information regarding non-dividend distributions from Form 1099-DIV for tax records?

The appropriate choice is grounded in the purpose of non-dividend distributions and capitalization of basis for tax purposes. Non-dividend distributions reduce the stockholder's basis in the investment. Therefore, if Deon ever sells the stock, he will need this information to correctly calculate his gain or loss on the sale.

When a stockholder has non-dividend distributions, these amounts are treated as a return of capital and directly affect the shareholder's basis in the stock. If Deon does not keep track of these non-dividend distributions, he may miscalculate his capital gains or losses when he eventually sells the stock. Thus, retaining this information is necessary for accurate record-keeping and tax reporting, ensuring that Deon complies with tax regulations and accurately reports his financial transactions.