Investment Income

[Super Mom]

I have a client with 3 1099-B's. I've never seen those before and my tax software does not have the form to enter the info on so I want to be sure I do it right. According to the tax book, I think I report line 2 gross proceeds on Schedule D. How do I know whether it's long term or short term, all the detail has is a trade date.
Also on one of the 1099-DIV's there is Foreign Tax withheld. My tax software asks for the country, the brokers tell me various--can I put that in? and isn't there some credit for Foreign Tax Paid???? And I think it was my software that said he has till June to file a TDF 90-221. All the brokers I talked to have no clue what that is. One man did tell me something about a 5498 due by May 31???? I don't know what to do, I have researched a bunch on this and will research more, any help from someone experienced with this would be GREATLY appreciated!!!!!!!!!!!!!

[AZ-Tax]

Depending on your software...

I have a client with 3 1099-B's. I've never seen those before and my tax software does not have the form to enter the info on so I want to be sure I do it right. According to the tax book, I think I report line 2 gross proceeds on Schedule D. How do I know whether it's long term or short term, all the detail has is a trade date.
Also on one of the 1099-DIV's there is Foreign Tax withheld. My tax software asks for the country, the brokers tell me various--can I put that in? and isn't there some credit for Foreign Tax Paid???? And I think it was my software that said he has till June to file a TDF 90-221. All the brokers I talked to have no clue what that is. One man did tell me something about a 5498 due by May 31???? I don't know what to do, I have researched a bunch on this and will research more, any help from someone experienced with this would be GREATLY appreciated!!!!!!!!!!!!!

Chances are you probably received a consolidated 1099-B, 1099-Div and 1099-Int statement issued by the Brokerage house or Clearing firm. My ProSeries software gives me the option in Sch D to choose short term (investment held less then 1 yr) or long term (investment held for over 1 yr) otherwise you will need to enter the sales and bot date for each transaction and if there are quite a few, consider using the form 8453 opposed to entering each one and just suming up the ST and the LT trades. Hopefully your 1099-B is displaying the cost basis for each security sold if not I would tell the TP to contact the broker they originally bot the security from and obtain the cost basis. The gross proceeds of the sale minus the cost basis will result in a net loss or net gain. If the Foreign Tax Paid is not a large amt (under $100), you may want to just enter the amt on ln 47 of form 1040 and bypass completing form 1116. Brokers not having a clue what this is does not surprise anyone on this board. Brokers dont exactly want to deal with tax preparers like ourselves for they recieve NO commission for their time unles they can sell the tax preparer something. I believe form 5498 is for qualified retirement acct rollover, custodian transfer etc and is usually a non taxable event and does not need to be entered no where on the tax return that I am aware of .

[Burke]

I am a little bit surprised that anyone who prepares taxes would not know what all these forms are. There should be an input in any tax software for Foreign Tax Paid (it is on the 1099-DIV input), and Sche D for 1099-B's. Foreign taxes withheld on passive income from divs on mutual funds should flow thru to page 2 of 1040, no Form 1116 required. TDF90-221 is the form one completes if they have a foreign bank account in excess of $10,000 (see bottom of Sche B for questions to check yes/no that reference this form.) Form 5498 is simply the form banks and brokerages send to the taxpayer (and the IRS) giving him information on contributions, rollovers, and FMV as of 12/31/08.

[Super Mom]

New Experience

I am a little bit surprised that anyone who prepares taxes would not know what all these forms are. There should be an input in any tax software for Foreign Tax Paid (it is on the 1099-DIV input), and Sche D for 1099-B's. Foreign taxes withheld on passive income from divs on mutual funds should flow thru to page 2 of 1040, no Form 1116 required. TDF90-221 is the form one completes if they have a foreign bank account in excess of $10,000 (see bottom of Sche B for questions to check yes/no that reference this form.) Form 5498 is simply the form banks and brokerages send to the taxpayer (and the IRS) giving him information on contributions, rollovers, and FMV as of 12/31/08.

I'm a small part time preperarer and this is the first time I've had a 1099-B. Thanks for the information, I've found all of that out from research.

[Super Mom]

Thanks!

Chances are you probably received a consolidated 1099-B, 1099-Div and 1099-Int statement issued by the Brokerage house or Clearing firm. My ProSeries software gives me the option in Sch D to choose short term (investment held less then 1 yr) or long term (investment held for over 1 yr) otherwise you will need to enter the sales and bot date for each transaction and if there are quite a few, consider using the form 8453 opposed to entering each one and just suming up the ST and the LT trades. Hopefully your 1099-B is displaying the cost basis for each security sold if not I would tell the TP to contact the broker they originally bot the security from and obtain the cost basis. The gross proceeds of the sale minus the cost basis will result in a net loss or net gain. If the Foreign Tax Paid is not a large amt (under $100), you may want to just enter the amt on ln 47 of form 1040 and bypass completing form 1116. Brokers not having a clue what this is does not surprise anyone on this board. Brokers dont exactly want to deal with tax preparers like ourselves for they recieve NO commission for their time unles they can sell the tax preparer something. I believe form 5498 is for qualified retirement acct rollover, custodian transfer etc and is usually a non taxable event and does not need to be entered no where on the tax return that I am aware of .

Thank you so much for the great information. The 1099-B's both only have a transaction date, they don't have the bought and sell information that is on a 1099-DIV so I thought I was missing something on this. I'll talk to the TP but I wanted to be a little educated first! Thanks!!

[JSLATER]

Your client should have a summary sheet that came with the 1099-B. Hopefully, the basis will be on that.

"The 1099-B's both only have a transaction date, they don't have the bought and sell information that is on a 1099-DIV."

There won't be any buy and sell information on a 1099DIV.

[Burke]

Are these by any chance proceeds from the sale of fractional shares of stock due to a spinoff like Fairpoint Communications or other companies, etc.? If so, I know what you are talking about. The 1099-B is all you get and it looks different from the ones brokers provide. They don't have any buy date or basis info, only gross proceeds and sale date. They are usually minimal amounts, only a few dollars. I don't even bother with trying to find out buy info on these. It's a complicated process because the underlying stock has to be refigured. Just put on Sche D with zero basis. It rarely makes any difference on the bottom line.

[Super Mom]

Are these by any chance proceeds from the sale of fractional shares of stock due to a spinoff like Fairpoint Communications or other companies, etc.? If so, I know what you are talking about. The 1099-B is all you get and it looks different from the ones brokers provide. They don't have any buy date or basis info, only gross proceeds and sale date. They are usually minimal amounts, only a few dollars. I don't even bother with trying to find out buy info on these. It's a complicated process because the underlying stock has to be refigured. Just put on Sche D with zero basis. It rarely makes any difference on the bottom line.

These are very large amounts of money. I have the details of the 1099-B and it only gives a transaction date.

[Super Mom]

Your client should have a summary sheet that came with the 1099-B. Hopefully, the basis will be on that.

"The 1099-B's both only have a transaction date, they don't have the bought and sell information that is on a 1099-DIV."

There won't be any buy and sell information on a 1099DIV.

I didn't mean that the buy sell info was on the actual 1099-DIV but on the details, I have the details of the 1099-B also but it only has a trade date.

[Super Mom]

I didn't mean that the buy sell info was on the actual 1099-DIV but on the details, I have the details of the 1099-B also but it only has a trade date.

I was mistaken!!! Those details were from a print out that goes with the other net proceeds call "realized sale activity" that matches with one of the 1099-B's and gives all the buy/sell detail, I guess I need a printout like that for the other 1099-B. Thanks for all of your patience and help as I figure this one out!!!!

[Super Mom]

Thanks!

Your client should have a summary sheet that came with the 1099-B. Hopefully, the basis will be on that.

"The 1099-B's both only have a transaction date, they don't have the bought and sell information that is on a 1099-DIV."

There won't be any buy and sell information on a 1099DIV.

Your message made me look again at where I had gotten the previous buy/sell info, I looked at the title of the report and new the broker lingo, called the company and they faxed what I needed over and I had it in hand in a matter of minutes. What a relief to get this taken care of!!! Bless you!!!!!!