Schwab 2010 year end summary for IRA?

[AZ-Tax]

I have several clients who have self directed IRA brokerage accts and none of them receive a year end summary displaying LT & ST gains. Any gain is tax deferred, any loss is not deducible and all distributions are subject to income tax and penalties so why even issue a 2010 year end summary for an IRA and confuse the heck out of us tax preparers.

[taxmom34]

i don't know if it's a bank rule or some other rule, but my credit union sends out the 5498 (?) not sure is that's the number) in May. after taxpayer has done his return.

[taxxcpa]

Year-end summary

I have several clients who have self directed IRA brokerage accts and none of them receive a year end summary displaying LT & ST gains. Any gain is tax deferred, any loss is not deducible and all distributions are subject to income tax and penalties so why even issue a 2010 year end summary for an IRA and confuse the heck out of us tax preparers.

Most of the year-and summary is for information only to let their clients know what has taken place in their account even though no gains or losses are taxable. The year-end balance is the only thing tax-relevant and is only relevant if you are taking required minimum distributions.

[taxea]

They are not providing the information for tax purposes but for the convenience of the investor who should be wanting to keep track of the investments. You get it from your client because they don't know what you need and what you don't need.

[DonPriebe]

But look carefully ...

They are not providing the information for tax purposes but for the convenience of the investor who should be wanting to keep track of the investments. ...

Agreed. Fidelity also provides basis information on the individual mutual funds within a retirement account, even though it is not needed. But in Fidelity's case, the information is calculated differently than for taxable accounts. For taxable accounts they correctly include the original investment and any reinvested dividends in basis. For retirement accounts, they do NOT include reinvested dividends. An investor seeking to calculate "gain" on a sale would get different results for identical investments within and external to a retirement account.

Which "gain" number is correct for the purposes of evaluating an investment is a question left to the student.

[Gary2]

i don't know if it's a bank rule or some other rule, but my credit union sends out the 5498 (?) not sure is that's the number) in May. after taxpayer has done his return.

The IRS due date for mailing the 5498 is May 31, so it's not a bank rule. This is because the due date for prior year contributions is April 15, so the IRA custodians don't necessarily have the correct information until then.

If you look at a 5498 received earlier in the year, it will probably have a disclaimer saying that they may issue an updated 5498 should the recipient make a prior-year contribution.

[joanmcq]

The 5498 also reports contributions, which are matched to tax returns. Also, if you have to prove or calculate basis later, they sure come in handy...if you have the returns as well.