New thing I've never seen

[FEDUKE404]

Reporting sales information

"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.

This is exactly what I have experienced. "Various" works well with cost basis (except you need to separate short term/long term), and perhaps "x" the box for the correct category since the software cannot otherwise calculate the holding period (or may even worse default to ST?).

I don't know how the IRS (in theory) tracks Form 1099-B information, but since the "date sold" goes with each event one would think perhaps it might be prudent for that same information to appear on the Sch D (or relevant attachment). It's not unlike receiving four Forms 1099-INT from the same bank and then listing only one entry on Schedule B. While such a procedure "may" work....it also might not.

As for the concept of using all of the "prior year" purchases as a reliable cost basis, especially in a day-trader type account, I see that as a loudly ticking time bomb for the preparer involved. While filing in such a way may get your return in the IRS door, any later audit questions could become quite challenging for all involved!

FE

[BHoffman]

I still pouring over the pages. It appears that many sales were made within days of purchase for the same number of shares. It also appears that all of the purchases were sold in the same year. I'm wondering about the wash sales and the basis changing, but believe at the end of the day it all comes out to the same net. Very much would like to simply attach the brokerage statement, showing all of the sales and purchases instead of preparing a 17 page spreadsheet.

[OtisMozzetti]

enter name of the brokerage as the description

"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.

What I have done several times, for years, is to take the brokerage gain/loss summary, make some annotations (column headings and column totals), and attach that brokerage statement to the tax return. Then on the Schedule D in the software I enter the name of the broker, not the name of the stock or other security, and usually enter "various" for the purchase date, and 12/31/YYYY (instead of "various") for the sale date. If there are more than 10,000,000 in gross proceeds, I might have to enter the transaction history on more than one line, since this particular software has a $10 million limit per transaction.

All of the points that others have noted about separating the short-term from the long-term, and about watching out for wash sales, etc. must be observed.

[Burke]

I don't know how the IRS (in theory) tracks Form 1099-B information, but since the "date sold" goes with each event one would think perhaps it might be prudent for that same information to appear on the Sch D (or relevant attachment). It's not unlike receiving four Forms 1099-INT from the same bank and then listing only one entry on Schedule B. While such a procedure "may" work....it also might not.FE

I am not sure that they "track" any detail on the 1099-B in the beginning except for the gross sales, which are obviously matched to every return filed. It is my opinion that the detailed information is on there in the event the return falls out for review or audit, since the one-line entry gets the return processed upfront. If the total gross sales match the IRS figures 12-18 months down the line, all is ok as well. And on the 1099-DIV, I have aggregated several from the same bank in the past with no problems. It worked fine. I do not do that anymore, however, simply because I want to review info on past returns, if necessary, by looking at the Sche B, and not paging thru pages of copies of 1099-DIV/INT's. If you ever get a CP adjustment letter with detail of these items, it often does not include all of them actually reported on the tax return.

[gkaiseril]

More likely the IRS has not matched all the data provided to them for many reasons. It is always better to report what the client provides and then if necessary after investigation add any items the IRS has that your client did not report that belonged to them. If the item does not belong to the client then inform the IRS of the fact and why it is not the responsibility of the client.