I just don't get it

[Lion]

2011

Aren't they only on the hook to report new purchases beginning 2011 while clients at that brokerage? And, maybe for the first year, only certain things, such as mutual funds, with other securites phased in over the years? And, still no historical data required? It's a start, but a very small one.

[TaxBird]

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.

Say, are you trying to get me grounded?

(Please see my previous post where I reveal that this particular client is actually my Mom. Apologies for the unnecessary subterfuge)

[Burke]

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

Yes, but they are only "required" to provide it for purchases made in 2011 and later. They do not have to go back and calculate old basis for a client who may have purchased his stocks elsewhere. So it will be a while before all these thresh out. BTW, I have advised my clients who have accounts with firms who do not provide basis to move their accounts to one who does. With zero capital gains rate applying to certain TP's, this is a good year to accomplish that.
Picked up a nice fee year before last going through old records to establish stock basis for a client in a nursing home. Finally found all of in 1988. And the splits, spinoffs, mergers and acquisitions since via the Internet. I rather enjoyed it and it was NOT during tax season. Also, caution your clients who ask "how long do I need to keep my tax returns?" to remove all those DRIP statements out of their folders FIRST! I am also now labeling them with a big note, KEEP IN PERMANENT FILE ELSEWHERE.

[FEDUKE404]

Worthwhile addendum

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. (snipped)

I actually discussed this issue with my stockbroker earlier today.

The stockbrokers are only required to provide cost basis information involving purchases made after 12/31/2010.

Many mutual funds have been tracking cost basis for some time, and their information is normally quite good.

But anyone having shares that have been rattling around in an investment account for years, especially including something like inherited shares, cannot expect much tax help from the stockbroker even with the new rules. Most brokerage firms are "urging" their clients to provide them with accurate cost basis information. Good luck on that!

Another caveat of note: Apparently various third party vendors are now providing "historical" information to the stockbrokers....the actual cost basis may differ from what has been shown in the extra gain/loss statements.

FE