1099-B Help!

[Super Mom]

When a client has a 1099-B and only one cost basis and gain is calculated but whether it is short term or long term is "uknown"--what do I do? Also, they have about $20,000 more in proceeds with an "unknown" cost basis and date aquired, I'm sure they paid something so it's not all gain and very possibly a loss---should I talk to the client or call the investment firm?

[luke]

call client

It is ultimately up to the CLIENT to provide YOU with his basis. The investment firm may or may not even know the basis (may have been an investment that was "transferred" to their firm without knowing the original basis, etc)
You shopuld contact the client and explain what you need and offer to "assist" him in re-constructing his cost basis if necessary?

[erchess]

Talk to the client

It is ultimately their responsibility to give you their cost basis. The most likely reason the broker doesn't know short or long term or doesn't know basis would be that the securities were transferred into this brokerage from another account.

[JohnH]

This is another place that email is especially helpful. I email the client a listing of the info I need (acg cost, acq date, number of shares, reinvestment activity, etc). At the end of the email I tell them "Your broker should be able to provide this info for you". They can then email the request on to the broker.

On the rare occasion when a client has emailed me back to say the broker can't help, I respond with a question to the effect "This is part of what you are paying him to do via his commissions. If he won't help then I'll have to charge you for my time to do his work for him." (And I really don't care if the client send THAT email to the broker as well.)

[David1980]

Preparing a zero basis short-term schedule D is often a great motivator for the client. Show them what they owe in a worst-case scenario and then tell them what you need to help bring down that balance owed.

Most of the ones I've done have gotten the info from their brokers. Not all though, as transferred investments or stuff owned for a really long time may not be on record with the current broker. At that point you hope the taxpayer knows when they purchased it and hopefully what they paid for it.