One of the reasons for the time it is taking to release the tax program this year is the inclusion of a new form called an 8949.
Information on this form will need to agree with the 1099-B forms you will receive from your broker. We are already seeing wide variation in how things are being reported on those forms and we have been adding programming so you will be able to handle the things you might run into.
We are also adding programming for accounting for wash sales. This is not a trivial matter and is something more of you than might know might have triggered. This year it will become more apparent because wash sales are something that are reported on 1099 forms and will need to be reported on the form 8949.
You will not be able to do your taxes if you have not received your 1099's. The reporting format on the forms we've seen is different
from broker to broker so part of what you will need to know is where to
find the information you're going to need. Depending on the sales your club had during the year, you may find 4 different categories of information on them.
Short-term transactions reported on Form 1099-B showing basis was reported to IRS (Section A)
Short-term transactions reported on Form 1099-B showing basis was not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was reported to IRS (Section A)
Long-term transactions reported on Form 1099-B showing basis was not reported to IRS (Section B)
For any of these categories where your club has transactions, you are going to need to know what the form says for:
Total Sales Price
Total Cost Basis
Total Wash Sale Adjustment
Total Gain/Loss
Familiarize yourself with your 1099's now and it will help speed up your tax preparation time when we release the program in the very near future.
Laurie Frederiksen Invest with your friends! www.bivio.com
So is there an impact if the the cost basis is incorrect in either of the
two sections marked:
Short-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
In other words, does the 1099-B form require
correction if the cost basis is incorrect, but the basis was not
reported to the IRS. It looks like we may have entered an incorrect
cost basis to a transferred position when we moved out account from one broker
to another.
One
of the reasons for the time it is taking to release the tax program this year is
the inclusion of a new form called an 8949.
Information on this form will
need to agree with the 1099-B forms you will receive from your broker. We
are already seeing wide variation in how things are being reported on those
forms and we have been adding programming so you will be able to handle the
things you might run into.
We are also adding programming for accounting
for wash sales. This is not a trivial matter and is something more of you than
might know might have triggered. This year it will become more apparent
because wash sales are something that are reported on 1099 forms and will need
to be reported on the form 8949.
You will not be able to do your taxes if
you have not received your 1099's. The reporting format on the forms we've seen
is different from broker to broker so part of what you will need to know is
where to find the information you're going to need. Depending on the sales
your club had during the year, you may find 4 different categories of
information on them.
Short-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Short-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
For any of these categories where your club has transactions, you are going
to need to know what the form says for:
Total Sales Price
Total Cost Basis
Total Wash Sale Adjustment
Total Gain/Loss
Familiarize yourself with your 1099's now and
it will help speed up your tax preparation time when we release the program in
the very near future.
Laurie Frederiksen Invest with your friends! www.bivio.com
No. What ultimately matters is that your taxes are reported correctly. If your information in bivio is correct for accounting for the investments involved in the transactions, it will be.
The broker will not be sending in the information from section B, nor is it reported on your tax forms, so it would not seem there is a pressing need to get them to correct it.
It is, however, important to understand why there are differences. It doesn't sound like this is your situation, but they may point out where your bivio records are incorrect and need to be corrected before you file your taxes.
I'd also make sure that you understand why the transactions reported in short term Section B were put there by your broker. We've already seen quite a few cases where transactions were put into that category incorrectly. In that case, you might want to request a revised 1099 because they really should be in section A where cost basis is reported.
Laurie Frederiksen Invest with your friends! www.bivio.com
So is there an impact if the the cost basis is incorrect in either of the
two sections marked:
Short-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
In other words, does the 1099-B form require
correction if the cost basis is incorrect, but the basis was not
reported to the IRS. It looks like we may have entered an incorrect
cost basis to a transferred position when we moved out account from one broker
to another.
One
of the reasons for the time it is taking to release the tax program this year is
the inclusion of a new form called an 8949.
Information on this form will
need to agree with the 1099-B forms you will receive from your broker. We
are already seeing wide variation in how things are being reported on those
forms and we have been adding programming so you will be able to handle the
things you might run into.
We are also adding programming for accounting
for wash sales. This is not a trivial matter and is something more of you than
might know might have triggered. This year it will become more apparent
because wash sales are something that are reported on 1099 forms and will need
to be reported on the form 8949.
You will not be able to do your taxes if
you have not received your 1099's. The reporting format on the forms we've seen
is different from broker to broker so part of what you will need to know is
where to find the information you're going to need. Depending on the sales
your club had during the year, you may find 4 different categories of
information on them.
Short-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Short-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
For any of these categories where your club has transactions, you are going
to need to know what the form says for:
Total Sales Price
Total Cost Basis
Total Wash Sale Adjustment
Total Gain/Loss
Familiarize yourself with your 1099's now and
it will help speed up your tax preparation time when we release the program in
the very near future.
Laurie Frederiksen Invest with your friends! www.bivio.com
Your previous answer contained the following statement:
"We've already seen quite a few cases where transactions
were put into that category incorrectly. In that case, you
might want to request a revised 1099 because they really
should be in section A where cost basis is reported."
Would you please provide the criteria that allows a
transaction to be in Section B. Our 1099 has some
transactions where the broker should have the basis
information because the purchase and sale went through the
broker; yet it put the transaction in the "basis not
reported to IRS" category.
I would find it helpful to know they types of transactions
that I should challenge the broker if they don't appear in
the "Section A" portion of the 1099.
Jack Ranby
ira smilovitz on
Common stock purchases made after 12/31/2010. Mutual fund and DRP purchases made after 12/31/2011.
Ira Smilovitz
On Sun, Feb 17, 2013 at 6:45 PM, John W Ranby <ranby@azbar.org> wrote:
Laurie:
Your previous answer contained the following statement:
"We've already seen quite a few cases where transactions
were put into that category incorrectly. In that case, you
might want to request a revised 1099 because they really
should be in section A where cost basis is reported."
Would you please provide the criteria that allows a
transaction to be in Section B. Our 1099 has some
transactions where the broker should have the basis
information because the purchase and sale went through the
broker; yet it put the transaction in the "basis not
reported to IRS" category.
I would find it helpful to know they types of transactions
that I should challenge the broker if they don't appear in
the "Section A" portion of the 1099.
Jack Ranby
Laurie Frederiksen on
Hi Jack,
Anything sold that is defined as a "covered security" should be reported in section A. Covered securities are:
any stock in a corporation acquired on or after January 1, 2011,
mutual fund and ETF shares acquired on or after January 1, 2012,
stock in a corporation purchased through a dividend reinvestment plan acquired on or after January 1, 2012, and (This is referring to Dividend reinvestment plans where stocks are purchased directly from a company. Not lots of stock purchased when your broker reinvests dividends for you)
notes, bonds, commodities (and derivatives or contracts based on commodities) acquired on or after January 1, 2013.
We have seen several 1099's where lots of stock purchased in 2011 and sold in 2012 were reported in section B. That is incorrect. If your club has this, you will have two options. We will have the ability for you to send in an 8949 that matches what the broker has given you. However, since it is wrong, you might be in a situation where they will later re-issue a "corrected" 1099. If you filed using the incorrect version, you might need to file an amended return.
Your alternative option will be to contact the broker and request a corrected 1099 before you file.
Any transaction involving sales of lots that were purchased prior to the dates above will be shown in Section B, basis not reported.
Hope that helps.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Sun, Feb 17, 2013 at 6:45 PM, John W Ranby <ranby@azbar.org> wrote:
Laurie:
Your previous answer contained the following statement:
"We've already seen quite a few cases where transactions
were put into that category incorrectly. In that case, you
might want to request a revised 1099 because they really
should be in section A where cost basis is reported."
Would you please provide the criteria that allows a
transaction to be in Section B. Our 1099 has some
transactions where the broker should have the basis
information because the purchase and sale went through the
broker; yet it put the transaction in the "basis not
reported to IRS" category.
I would find it helpful to know they types of transactions
that I should challenge the broker if they don't appear in
the "Section A" portion of the 1099.
Anything sold that is defined as a "covered security" should be reported in section A. Covered securities are:
any stock in a corporation acquired on or after January 1, 2011,
mutual fund and ETF shares acquired on or after January 1, 2012,
stock in a corporation purchased through a dividend reinvestment plan acquired on or after January 1, 2012, and (This is referring to Dividend reinvestment plans where stocks are purchased directly from a company. Not lots of stock purchased when your broker reinvests dividends for you)
notes, bonds, commodities (and derivatives or contracts based on commodities) acquired on or after January 1, 2013.
We have seen several 1099's where lots of stock purchased in 2011 and sold in 2012 were reported in section B. That is incorrect. If your club has this, you will have two options. We will have the ability for you to send in an 8949 that matches what the broker has given you. However, since it is wrong, you might be in a situation where they will later re-issue a "corrected" 1099. If you filed using the incorrect version, you might need to file an amended return.
Your alternative option will be to contact the broker and request a corrected 1099 before you file.
Any transaction involving sales of lots that were purchased prior to the dates above will be shown in Section B, basis not reported.
Hope that helps.
Laurie Frederiksen
Invest with your friends! www.bivio.com
to the Club Cafe email list. Click here to Unsubscribe
On Sun, Feb 17, 2013 at 6:45 PM, John W Ranby <ranby@azbar.org> wrote:
Laurie:
Your previous answer contained the following statement:
"We've already seen quite a few cases where transactions
were put into that category incorrectly. In that case, you
might want to request a revised 1099 because they really
should be in section A where cost basis is reported."
Would you please provide the criteria that allows a
transaction to be in Section B. Our 1099 has some
transactions where the broker should have the basis
information because the purchase and sale went through the
broker; yet it put the transaction in the "basis not
reported to IRS" category.
I would find it helpful to know they types of transactions
that I should challenge the broker if they don't appear in
the "Section A" portion of the 1099.
Jack Ranby
Nick on
Dear Laurie,
Since our club has conducted annual audits and we've been using Bivio for
quite a few years, I'm confident that our records are correct.
The transaction in question is for a stock that was originally purchased in
2006 and then sold in 2012. Based on yours and Ira's subsequent emails, the
basis does not have to be reported to the IRS since it was purchased prior to
12/31/10.
The error is definitely on the 1099-B and it is most likely the cause of
incorrect manual input of the cost basis onto the Fidelity account after the
club account was transferred to Fidelity.
Based on all of the above, it would appear that we don't need to obtain a
corrected 1099-B especially since we know our accounting records are
correct.
Please let me know if I'm right or wrong about the above and thanks so much
for your explanations about these new requirements.
No. What ultimately matters is that your taxes are reported
correctly. If your information in bivio is correct for accounting for the
investments involved in the transactions, it will be.
The broker will not
be sending in the information from section B, nor is it reported on your tax
forms, so it would not seem there is a pressing need to get them to correct
it.
It is, however, important to understand why there are
differences. It doesn't sound like this is your situation, but they may
point out where your bivio records are incorrect and need to be corrected before
you file your taxes.
I'd also make sure that you understand why the
transactions reported in short term Section B were put there by your
broker. We've already seen quite a few cases where transactions were put
into that category incorrectly. In that case, you might want to request a
revised 1099 because they really should be in section A where cost basis is
reported.
Laurie Frederiksen Invest with your friends! www.bivio.com
So is there an impact if the the cost basis is incorrect in either of the
two sections marked:
Short-term transactions reported on Form 1099-B showing basis
was not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
In other words, does the 1099-B form require
correction if the cost basis is incorrect, but the basis was not
reported to the IRS. It looks like we may have entered an incorrect cost
basis to a transferred position when we moved out account from one broker to
another.
One
of the reasons for the time it is taking to release the tax program this year
is the inclusion of a new form called an 8949.
Information on this form
will need to agree with the 1099-B forms you will receive from your
broker. We are already seeing wide variation in how things are being
reported on those forms and we have been adding programming so you will be
able to handle the things you might run into.
We are also adding
programming for accounting for wash sales. This is not a trivial matter and is
something more of you than might know might have triggered. This year it
will become more apparent because wash sales are something that are reported
on 1099 forms and will need to be reported on the form 8949.
You will
not be able to do your taxes if you have not received your 1099's. The
reporting format on the forms we've seen is different from broker to broker so
part of what you will need to know is where to find the information you're
going to need. Depending on the sales your club had during the year, you
may find 4 different categories of information on them.
Short-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Short-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
For any of these categories where your club has transactions, you are going
to need to know what the form says for:
Total Sales Price
Total Cost Basis
Total Wash Sale Adjustment
Total Gain/Loss
Familiarize yourself with your 1099's now and
it will help speed up your tax preparation time when we release the program in
the very near future.
Laurie Frederiksen Invest with your friends! www.bivio.com
Since our club has conducted annual audits and we've been using Bivio for
quite a few years, I'm confident that our records are correct.
The transaction in question is for a stock that was originally purchased in
2006 and then sold in 2012. Based on yours and Ira's subsequent emails, the
basis does not have to be reported to the IRS since it was purchased prior to
12/31/10.
The error is definitely on the 1099-B and it is most likely the cause of
incorrect manual input of the cost basis onto the Fidelity account after the
club account was transferred to Fidelity.
Based on all of the above, it would appear that we don't need to obtain a
corrected 1099-B especially since we know our accounting records are
correct.
Please let me know if I'm right or wrong about the above and thanks so much
for your explanations about these new requirements.
No. What ultimately matters is that your taxes are reported
correctly. If your information in bivio is correct for accounting for the
investments involved in the transactions, it will be.
The broker will not
be sending in the information from section B, nor is it reported on your tax
forms, so it would not seem there is a pressing need to get them to correct
it.
It is, however, important to understand why there are
differences. It doesn't sound like this is your situation, but they may
point out where your bivio records are incorrect and need to be corrected before
you file your taxes.
I'd also make sure that you understand why the
transactions reported in short term Section B were put there by your
broker. We've already seen quite a few cases where transactions were put
into that category incorrectly. In that case, you might want to request a
revised 1099 because they really should be in section A where cost basis is
reported.
Laurie Frederiksen Invest with your friends! www.bivio.com
So is there an impact if the the cost basis is incorrect in either of the
two sections marked:
Short-term transactions reported on Form 1099-B showing basis
was not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
In other words, does the 1099-B form require
correction if the cost basis is incorrect, but the basis was not
reported to the IRS. It looks like we may have entered an incorrect cost
basis to a transferred position when we moved out account from one broker to
another.
One
of the reasons for the time it is taking to release the tax program this year
is the inclusion of a new form called an 8949.
Information on this form
will need to agree with the 1099-B forms you will receive from your
broker. We are already seeing wide variation in how things are being
reported on those forms and we have been adding programming so you will be
able to handle the things you might run into.
We are also adding
programming for accounting for wash sales. This is not a trivial matter and is
something more of you than might know might have triggered. This year it
will become more apparent because wash sales are something that are reported
on 1099 forms and will need to be reported on the form 8949.
You will
not be able to do your taxes if you have not received your 1099's. The
reporting format on the forms we've seen is different from broker to broker so
part of what you will need to know is where to find the information you're
going to need. Depending on the sales your club had during the year, you
may find 4 different categories of information on them.
Short-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Short-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
Long-term transactions reported on Form 1099-B showing basis was
reported to IRS (Section A)
Long-term transactions reported on Form 1099-B showing basis was
not reported to IRS (Section B)
For any of these categories where your club has transactions, you are going
to need to know what the form says for:
Total Sales Price
Total Cost Basis
Total Wash Sale Adjustment
Total Gain/Loss
Familiarize yourself with your 1099's now and
it will help speed up your tax preparation time when we release the program in
the very near future.
Laurie Frederiksen Invest with your friends! www.bivio.com