If you have a sale of stock, some of which was purchased with dividends which were taxable in prior years, you would report the sale of the stock on Form 8949 Sales and Other Dispositions of Capital Assets and Schedule D Capital Gains and Losses by completing Form 1099-B Proceeds From Broker and Barter Exchange Transactions in your TaxAct^® return (you should have received Form 1099-B at the end of the year).

You would need to compute your basis in the shares that were sold. The dividends you received were taxable income in prior years, so when you bought shares using those dividends, that would be part of your basis in the stock acquired, along with any other money used to purchase stock.

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