New client (potentially) with pages and pages of a brokerage statement. 2008 preparer listed the total sales proceeds on Sch D and then took the total purchases made in 2008 and called that the basis. Just like that. Dates acquired and sold "various". All STCG. One line. How easy!
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One line - So easy... Fine for them..... No here!
My Dad used to do that years ago - Pre Computers -- Yup! I prepared them that way years ago! Pencil & calculator!! Wrote my first 1040 Fed & State program in Basic - While time sharing on a Decwriter 300 acoustic coupled modem and tele-type!! Those were the days!
Can't get away with that these days - My software won't accept various as an entry - some days so tired I wish it would!! Still haven't found easy downloadable entries for that. It's be nice if we could transfer it into Excel & have the software be able to read that if set into a standardized format. Hell - I write code for a living and I haven't found an easy way for that yet. Somethings wrong!!
My first computer was an Apple //e. I think I still have software around from those days. still have the CPU - Not sure if it works - Can't seem to throw it away!! No Green screen monitor any more...Matthew Jones
Tax Preparation
Computer Consultant
Tax Season is here!
Make sure everything is working, extra ink or toner is available, Advil in top drawer!
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My software allows various for dates as long as it is FIFO and same stock. I question and I think BH is doing the same....that the cost of 2008 purchased stock was used as the cost for the sold stock.....
BH does the stock stold match up with the stock purchased on the sheets. If various is used for either date then I average out the costs for the stock that was sold. Is this what you are asking?Believe nothing you have not personally researched and verified.Comment
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Well Matt, I really don't know what to think about this. How nice it would be to just let 'er fly, but I can tell at first glance that there are wash sales. Ewww. This is probably not going to be a client after I give them the fee estimate for doing the whole spreadsheet thing.
What ticks me off is this - he'll be going back to his old accountant who will prepare the return in the same manner and get paid and no problems with IRS. It's maddening sometimes. To do this correctly, you price yourself out of the game. Do this incorrectly, and there's no harm and no foul and a nice fee. Sheesh.
Which gets me to thinking about the EIC. To confidently let one of those returns go out, you really have to perform a full scale audit. Who's going to pay for that amount of time? Better to just deny the EIC and not tell the client? And if he asks, tell him you'll charge more to represent him during the audit than the EIC? WTF??? Pardon my language.
I'm not quite ready to get back in the saddle, evidently. Thanks for listening. Whew!Last edited by BHoffman; 08-06-2010, 03:05 AM.Comment
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Various
There are some situations where if you can't list "various" as an accommodation then you can't finish the return. This goes for stock purchases as well as things like municipal bonds. Often the only relevant factor is whether the item is ST or LT.
Now if your client will bring you his "bond-a-month" purchase history from 30 years ago, we won't have to use "various."Comment
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Assuming all the purchases were in 2008, and the same stocks were sold in 2008, then I don't see a problem with that, attaching a copy of the brokerage statement. Never had a problem. Of course, you do need to review for wash sales and isolate those, and if stocks sold were purchased over one year prior, then separate into ST & LT gain. As an aside, I just had to deal with the IRS on a TP self-prepared paper return brought to me where ALL the sales were detailed on the Schedule D (there were only 3) and there was an obvious net loss. The individual sale resulting in a loss was properly shown with parentheses, but the TP neglected to put those parentheses on the net total figure on bottom line, first page. However, second page showed negative carryover (with parentheses indicated) and max loss of $3,000, then carried to 1040. IRS keypunch operator ONLY picked up bottom line figure on first page of Sche D, and then as a POSITIVE, ignoring 2nd page, generating CP letter to TP for huge tax liability. So they don't input each sale! If they had, there would not have been a problem. They want us to meet this requirement, but fail to do so themselves.Last edited by Burke; 08-06-2010, 09:54 AM.Comment
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Read the instructions for Schedule D. One can use a brokerage statement to provide the detail of the trades, so long as the brokerage statement contains all of the data requested by Schedule D and summarizes the LT and ST gains. But this additional detail must be attached as a statement to the filed return.
You need to make sure there are wash sales, and if there are, make sure the computation of the gains are correct or reconcile them to the correct amount per the IRS requirements.
Also make sure you tie all the attached schedules and listed sales to the 1099-B totals or provide a reconciliation as to the differences, like open short sales reported as a sale.Last edited by gkaiseril; 08-06-2010, 02:26 PM.Comment
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Thanks for replies. I'm going thru the brokerage statement to make sure that all purchases were sold, so far looks like it is. I'd like to paper file this with the brokerage statement attached and just do the one-liner on the Sch D to compute the STCG and skip the spreadsheet work.Comment
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Works every time!Comment
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If your software will not accept 'various' put the earliest date for the STCG and the last date for the LTCG purchase date. and then put the total purchases, the total basis, and net gain or (loss) for each category. The description could be the brokers name. Yes the dates are sort of fake, but the detail list would provide the necessary explanation for everything.
I have even used client provided Excel spreadsheets, but I try to make sure they agree with the 1099-B and brokerage statements.Last edited by gkaiseril; 08-06-2010, 05:03 PM.Comment
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The software will accept "various" but it won't allow efiling. I think this one is going to be paper-filed. And, oh happy day, there are no wash sales after all
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Brokerage Stmt
I had one in 2008 - brokerage statement did not give the "adjusted cost basis" for wash sale, it was only the purchase price of the stock, not allocating Wash Sale Loss as Disallowed.
I had client go to the broker to furnish the adjusted cost basis for the disallowed wash sale, which ended up being a 2 year period 2008 - 2009. Client did not want to pay me to calculate as he was already paying the broker on a Advisory Mgmt Fee. I then had to do a separate spreadsheet for the Sched D disallowed in 2008 Disallowed and another one for 2009 allowed Wash Sale Loss. So I charged by hour and also line item.
Had I not tried to enter by line item off of the brokerage statement year end report, I would have never caught the "Wash Sale"
It was time consuming to enter 1133 entries in 2008 and another 400+ in 2009, but I feel I did my due diligence, and will escape a CP 2000 notice. I also feel I did the best I could for the tax client, to report the Wash Sales correctly in the proper year.
It was a nightmare!
SandyComment
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A celebration for you!
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My software
My software will accept "Various" and I can still efile, I did it for both 2008 and 2009 on my "nightmare multi transaction client" "Various" is in Acquistion Date and then Actual Sale Date has the "Sale Date", but then I was also "line item" input. I only grouped on acqusition date if it was in a few month period - like 1/09-2/09-3/09 then I would put "various".
SandyComment
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"Various" is approved by the IRS for purchase date
"Various" is approved by the IRS for purchase date, but not, as I understand it, for sale date. If software really doesn't allow it, or won't allow you to e-file with it, there's something wrong with the software, and I would scream at the vendor.Evan Appelman, EAComment
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