A return of capital distribution is a characterization of an entity’s dividend payments to shareholders for income tax purposes. It is a distribution in excess of an entity’s current and accumulated earnings and profits. Different from dividend income and capital gains distributions, return of capital distributions are currently non-taxable to shareholders, unless the distribution exceeds the shareholder’s basis in the stock prior to the distribution. Instead, a shareholder’s tax cost basis of the stock is reduced by the amount of the distribution, which increases the amount of capital gains (or decreases the capital loss) to be recognized when a shareholder sells his or her shares. The portion of distribution payments that are considered return of capital rather than taxable income will be reported in Box 3 of the Form 1099-DIV that BTCS shareholders receive at the end of each tax year for a BTCS stock investment. It is possible that a portion of a distribution is classified as return of capital whereas the remaining portion of the distribution is considered taxable income.