I just don't get it

[TaxBird]

I have a client who had two stock redemptions in 2010. They received no cost basis information with their 1099 B despite the fact that a note on the back of the 1099B said the average cost basis information had been provided.

When I called for the information, I was told that they would have to send out the account transcript (too large to fax) and I would have to figure that out. Plus, the soonest I could receive it is 3-5 business days.

Has anyone ever heard of this? I haven't done that many stock redemptions but usually cost information is provided, if not automatically, then when requested.

Can anyone provide any insight into why it might be that the fund manager wouldn't want to provide average cost information on a fund?

[Acownt4it]

can you say

ponzi scheme? Ok, maybe not, but that is not something I have run into.

[taxdude71]

Reason? Either they don't want too or they don't have the information. I've run into this many times.

[TaxBird]

Glad to hear it isn't so unusual. Still annoying but no longer unusual.

Thanks to everyone who responded.

[luke]

Dont forget YOUR extra fee for doing CLIENT's (broker's) work!

[ChEAr$]

When you said "stock redemption", it wasn't too clear, but I THINK you mean mutual fund redemption, right?

I've never seen a 1099B from a mutual fund company (at least in recent years) not provided average cost for shares redeemed.

So tell us which fund this is, so we can avoid it and tell clients to avoid it.

[Burke]

I often see the term "redemption" on a 1099B when it is a bond. And that term is usually applied when it redeems at face value. Did the 1099B actually say that? I have even seen it when CD's mature in a brokerage account.

[Kram BergGold]

Schwab

If this is a Schwab sale the realized gains and loss report is mailed separate from the 1099. your client should be able to provide it.

[joanmcq]

The realized gains & losses are usually on a section of the statement titled "information NOT provided to the IRS' and so the clients don't think we need them. Ask the client first if any other stuff just might have come from the broker....

[gboykin]

If the broker won't figure the basis, neither will I. The broker got commissions whenever there were any re-invested dividends, when there were purchases, and on the sale. They should now have to earn their commissions.

Otherwise, the client can get the report that the broker sends and figure the basis.

[Bonnie]

One of the worst I've run across is a company called First Command. In our area they deal mainly with military and do lots of investements with a set amount being invested every month. They are horrible and will not provide the cost basis. A few years back my customer did not have the statments from when they made the investments periodically over time. First Command charged them $50 to mail the statements to them so I could figure the cost basis and it took about 3 months for the taxpayer to receive the statements. This is just one incident I have had with this company and I want to tell everyone to run away from them.

[AZ-Tax]

I will never forget the day several years ago....

I will never forget the day several years ago when I new client walks in with a his 1099-B w/o cost basis. The first time in my life I met him and talked to him. I told him I needed cost basis for your trades, his reply....are you sitting down, actually are you layiing down for this "Don't you have them?"

[Golden Rocket]

It's About Time

I've run into this several times in the past. The good news (if you can believe it), is beginning in 2011, the issuers of 1099-B are being forced to disclose the basis. Furthermore, they are not just having to report this to the recipient (in which case there would never be any improvement). They are having to report this to the IRS as an integral part of the 1099-B.

I can already hear the excuses from the big brokerage houses and insurance companies. "The taxpayer does not have to use FIFO, so we don't really know what his basis might be." "He has owned this stock for 30 years and we don't have the records that go back that far." "The taxpayer was given the opportunity to furnish this to us and has chosen not to do so."

These huge financial companies are powerful enough to get the requirement changed. They are part of the thousands of lobbyists who run Congress. My best guess is that there will be "technical correction" to this requirement letting them off the hook in cases where they have to go to a lot of extra trouble, or the requirement may be watered down with language that the requirement only exists "if possible."

To their credit, many of these companies ARE providing basis, but not as an integral part of the 1099-B.

[TaxBird]

Dont forget YOUR extra fee for doing CLIENT's (broker's) work!

Ah yes. In this case Client = Mom so I will charge one additional home-cooked meal ( a rarity for me this time of year) PLUS dessert. I'm thinking risotto.

Incidentally, I don't know why I felt the need to *disguise* her. Habit, I guess.

[TaxBird]

When you said "stock redemption", it wasn't too clear, but I THINK you mean mutual fund redemption, right?

I've never seen a 1099B from a mutual fund company (at least in recent years) not provided average cost for shares redeemed.

So tell us which fund this is, so we can avoid it and tell clients to avoid it.

Yes. You're correct> I meant to say 'mututal fund redemption'. Glad to see the skills you acquired in your apprenticeship as one of Dionne's Psychic Friends are still serving you. As you can see, my apprenticeship under Jackie Stallone didn't prepare me nearly as well.

AND I will gladly tell you who the skunks are...it is the DWS Fund (Deutsche Bank Group) - DWS Strategic Government SEC Fund A.

I think what annoyed me most of all was when I asked why was there a reference to the "provided" average cost when none was (and will be) provided. The lady simply responded something to the effect 'we issue it for some funds but not all but we're not required to send it so we wont. We'll send you the account transcript and let you figure it out'.

The nerve!

Tax Bird (who's obviously feeling a little punchy this late in the season)