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Expected Tax Implications
All of the distributions paid during 2014 were a return of capital for federal tax purposes and will not be currently taxable. The return of capital distribution reduces the holder’s basis in their Universal American stock.
For example, if you owned 100 shares of Universal American Corp. mandatorily redeemable preferred stock on the record date of all four payments made in 2014, you received a $212.50 distribution. Of that distribution no amount is currently taxable; the entire $212.50 is a return of capital that reduces your basis in each share of stock by $2.125.
Please see your personal tax advisor to determine how this information should be used on your personal tax return. This information is meant as general information only.