1099-b

[gman]

Six pages of sales and cost related items from 1099-b E Jones. Can it be listed with just the total ST and LT totals on the last page of form?. Schedule D & 8949. Seems like this was discussed last year on the board .

[Gene V]

Six pages of sales and cost related items from 1099-b E Jones. Can it be listed with just the total ST and LT totals on the last page of form?. Schedule D & 8949. Seems like this was discussed last year on the board .

From instruction 1040 (D)

Exception to reporting each transaction on
a separate line. Instead of reporting each
of your transactions on a separate line of
Form 8949, you can report them on an at-
tached statement containing all the same
information as Form 8949 and in a similar
format. Use as many attached statements as
you need. Enter the combined totals from
all your attached statements on a Form
8949 with the appropriate box checked. For
example, report on line 3 of a Form 8949
with box A checked all long-term gains and
losses from transactions your broker re-
ported to you on a statement showing that
the basis of the property sold was reported
to the IRS. If you have statements from
more than one broker, report the totals from
each broker on a separate line.
Do not enter “available upon request”
and summary totals in lieu of reporting the
details of each transaction on Form(s) 8949
or attached statements.

Attached statements to Form 8453

[gman]

Information

Thanks for the information, so scan and attach or mail in with the return.

[Lion]

Import

Or, tell your client to have his broker email you an Excel worksheet of his gain/loss statement and import it into your program.

[TAX4US]

I am finding the codes on the 1099 B to be somwhat misleading. I see a code B that suggest basis information may not be correct,, however according to client this is best information he has. If code is put on form does this indicate to IRS that we really don't know what basis is and using best guess anybody has. I wonder what the raminifications may be 18 months down the road when asked to verify basis. Any thoughts on this issue?

[Burke]

I am finding the codes on the 1099 B to be somwhat misleading. I see a code B that suggest basis information may not be correct,, however according to client this is best information he has. If code is put on form does this indicate to IRS that we really don't know what basis is and using best guess anybody has. I wonder what the raminifications may be 18 months down the road when asked to verify basis. Any thoughts on this issue?

It is probably indicating basis info may not be correct because the brokerage got it from the TP and not from their own records of purchases. (CYA.) Stocks could have been purchased via another brokerage originally. Even when all these banks/brokerages were changed -- Wachovia to Wells Fargo for instance -- I found a lot of basis info did not transfer. I don't know if that in particular will cause any problems in the future; I can expect this situation going to happen quite frequently.

[DonPriebe]

I am finding the codes on the 1099 B to be somwhat misleading. I see a code B that suggest basis information may not be correct,, however according to client this is best information he has. If code is put on form does this indicate to IRS that we really don't know what basis is and using best guess anybody has. I wonder what the raminifications may be 18 months down the road when asked to verify basis. Any thoughts on this issue?

I don't understand the question. AFAIK, there is no "Code" on a 1099-B. What box is this "code" in?

[BP.]

I don't understand the question. AFAIK, there is no "Code" on a 1099-B. What box is this "code" in?

1099-B instructions:
"New boxes. New boxes have been added to Form 1099-B for reporting the stock or other symbol (box 1d), quantity sold (box 1e), whether basis is being reported to the IRS (box 6b), and state income tax withheld (boxes 13-15). "
The codes indicate info about basis.

[Gary2]

I don't understand the question. AFAIK, there is no "Code" on a 1099-B. What box is this "code" in?

1099-B instructions:
"New boxes. New boxes have been added to Form 1099-B for reporting the stock or other symbol (box 1d), quantity sold (box 1e), whether basis is being reported to the IRS (box 6b), and state income tax withheld (boxes 13-15). "
The codes indicate info about basis.

There are new checkboxes on the 1099-B, but no letter codes. Since brokerages are allowed substitute 1099-Bs, I can think of several possibilities:

1. They designated one more individual sales with a code B, corresponding to the code that goes (coincidentally) into column (b) on the 8949. On the 8949, code B in column (b) indicates that the taxpayer believes the reported basis is incorrect. Why the brokerage would report this is, as suggested by Tax4Us, anybody's guess. This does not mean the taxpayer must include code B on the 8949. The taxpayer may believe that the basis on the 1099-B is correct. Conversely, even without this code on the 1099-B, the taxpayer is entitled to enter code B on the 8949 if there's sound reason to believe the 1099-B is incorrect.
2. It's designed to be used as a substitute 8949, with Box B checked, meaning short term capital gains with no basis. After rereading the post carefully, I don't think this is the case, but it is the first option that occurred to me.
3. The brokerage is using their own footnotes, and code B means something entirely different. Break out the reading glasses or magnifying glass, and read the fine print on the statement.
4. The brokerage is using code B to mean whatever the IRS meant it to mean when they issued the draft instructions for the 8949 in late summer or early fall. I no longer have access to the preliminary instructions, but the IRS totally revamped the codes at the beginning of December (creating chaos for more than one software team, I'm sure).

[DonPriebe]

Now we're confusing the box B on a 8949 [meaning the sale was reported on a 1099-B, but the basis (if any) shown on the 1099-B was NOT reported to the IRS], with a code B [meaning that the basis was incorrect]. Classification into Box B is determined by the preparer dependent on how the transaction was reported. Code B is also determined by the preparer if he has evidence that the reported basis is incorrect.

Note that the 2012 version of the 1099-B, already posted on irs.gov, has checkboxes for "Noncovered security" and "Basis reported to IRS"

[Gary2]

One more point on sending the brokerage statements via the 8453 in lieu of individual entries: The brokerage statements need to contain all the same info per transaction, i.e., both purchase and sale dates, quantity, security, basis, and sale price.

I've seen statements in previous years that omit the purchase date, with just a long term versus short term flag - not good enough. Others have the sale information in one group, purchase info on a separate page - technically not good enough (the IRS wants the taxpayer to do the matching).

[Burke]

If I were the IRS, I would totally disregard any basis reporting by brokerages for this year! Unless they want to hire a bunch of more people. And I am going to attach the statements with a summary on 8949 just like I have always done, as long as the info is there, regardless of where on the page it is.

[taxea]

I am finding the codes on the 1099 B to be somwhat misleading. I see a code B that suggest basis information may not be correct,, however according to client this is best information he has. If code is put on form does this indicate to IRS that we really don't know what basis is and using best guess anybody has. I wonder what the raminifications may be 18 months down the road when asked to verify basis. Any thoughts on this issue?

You have the client provide you with the document that explains why the basis may not be correct. This would be from his investment company, Many times when the account has been transferred from one company to another the basis in the former stock does not transfer along. This is why I pound into my clients to keep their statements forever. Because the basis information is needed when the stock is sold and the present company doesn't already have it.

I would also send the client back to the original company to obtain the records.