Even if Costs are supplied on the 1099-B, AND the box 6 is marked with an "X" (cost NOT supplied to IRS) does it go to box B on the 8949 anyway? Seems stupid. Please explain.
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Yes, you check Box B if it is not reported to the IRS, even though they put the CB on the 1099-B. (Seems to be the majority this year.) See IRS instructions for Sched D and Form 8949. -
1099 B Clerified
Seem like Schedule D is the important Form-Still. Is Form 8949 only for "fact gathering"?Comment
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Simplest explanation
Think of it like an on/off light switch:
"A" equals "on" meaning the cost basis WAS provided to the IRS via Form 1099-B.
"B" equals "off" meaning the cost basis was NOT provided to the IRS via Form 1099-B.
Most (but not all) investments purchased after 12/31/2010 will be "A." Think short-term sales.
All of the "A" sales herd onto one Form 8949, and all of the "B" sales herd onto a separate Form 8949.
The fact that the investment firm "shows" the cost basis has no relevance to the underlying "A" versus "B" issues.
FEComment
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If cost basis is reported on the 1099-B, how is it not being reported to IRS? IRS gets the 1099-B from the payer, so basis IS being reported to IRS.
The only way its not being reported to IRS is when basis is not on the 1099-B but instead being reported to the recipient on a supplemental page.Comment
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I don't think so. The brokers send the 1099-B info in a different format than the paper they send to the TP. Most are not reporting basis this year, especially on mutual funds. They don't have to until next year. But some have always reported basis to the TP. Some of these 1099-B's that show basis, clearly state that it has not been reported to the IRS, (in words, not by codes.)Comment
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It's called "gratuitous reporting" to the client when not in the huge, probably electronic, file the broker sends to the IRS. It's my new favorite tax term, replacing my long-time favorite "disregarded entity."Comment
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As I mentioned in another thread, the financial institutions (all) misinterperted what IRS was asking for. They took it literally. IRS wanted AT LEAST 2011 cost basis for purchases. Not that they should EXCLUDE prior year cost basis and purchase dates.
What a mess this year. I hope next year we get FULL basis/date info on the 1099B statements.This post is for discussion purposes only and should be verified with other sources before actual use.
Many times I post additional info on the post, Click on "message board" for updated content.Comment
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Not likely. The 1099-B for 2012 has already been released and now has two checkboxes - one to indicate if the trade was a 'covered' trade and the other to indicate if the cost basis was reported to the IRS.... What a mess this year. I hope next year we get FULL basis/date info on the 1099B statements.
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1099 B Clerified
Will there be any consequences if the boxes are marked "wrong"?Comment
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