Suggestions sought on Sch D entries

[FEDUKE404]

This question is specifically directed at the optional use, or non-use, of Lines 1a and/or 8a on Schedule D.

While I understand the purpose of those lines (sales of everything with a cost basis that IS reported to the IRS can now go there, thus simplifying Form 8949....the future approaches etc), I am finding it very hard to track the sales of "reported" cost basis assets. Of course, the software worksheets will hopefully contain a more detailed list, but the tax return per se may be very confusing to the client.

Specific example: Client has a total of five sales, with two different brokerage firms. Not a complicated situation, in my opinion, to directly enter the details of those five sales. The software default setting shows, on Form 8949, details for only two of the five sales (three out of the five sales DO have cost basis reported to the IRS). The other three sales are "combined" using lines 1a/8a on Schedule D. When I check the box to "display" the full information on Form 8949, there are then shown five transactions in three groups - ST reported, LT reported, and LT not reported. On Schedule D, lines 1a and 8a are then blank.

It's still somewhat early in the tax season, especially for those with stock sales / investment income, so I'm still trying out the waters here.

My gut feeling is (my choice!) to forgo the use of lines 1a and 8a on Schedule D, tell my software to select "Plan B" to show detailed Form 8949 information (similar to what it was for 2012 returns), and have an actual tax return that can perhaps be more clearly understood by myself and the client.

Am I missing something here??

Please feel free to express your current year experiences and/or personal opinion on this topic.

Thanks in advance!

FE

[TaxGuyBill]

[color=blue]the tax return per se may be very confusing to the client.

You have clients that actually look at their tax return? :-)

[DonPriebe]

I like it

Did a return last night - client with three Schwab accounts, each with about five short-term covered, five long-term covered and five long-term non-covered trades. Using lines 1a and 8a reduced the number of trades I had to enter from 45 down to 15. Yes, I did an Excel spreadsheet to back-up the numbers, so I know where they came from, but I normally do that anyway.

If there is a small number of trades, I use the conventional method which is easier to understand.

[FEDUKE404]

Making the selection

Did a return last night - client with three Schwab accounts, each with about five short-term covered, five long-term covered and five long-term non-covered trades. Using lines 1a and 8a reduced the number of trades I had to enter from 45 down to 15. Yes, I did an Excel spreadsheet to back-up the numbers, so I know where they came from, but I normally do that anyway.

If there is a small number of trades, I use the conventional method which is easier to understand.

Perhaps I was unclear....I still have to enter the five transactions. The difference is a Y/N option as to how many entries actually appear on the Forms 8949.

As for your separately putting the transactions into an Excel spreadsheet, although I see how that could give you some mental peace as to overall accuracy, it would appear to me that you are otherwise doing additional work....i.e. more than what I am now doing regardless of how I set the Y/N switch.

FE

[Maribeth]

Haven't made a decision yet as to how we will do the Sch D reporting. We too have a worksheet to reconcile Sch D transactions and have been using that worksheet to upload the Sch D transactions. By doing that, there is no reason to use the new total lines on the Sch D.

I am feeling that we will probably continue to use the worksheet and upload. The Sch D transactions have to be reconciled anyway so why not use our worksheet?

[joanmcq]

I reconcile to the 1099-B itself from the Sch. D. I find the Schwab (and several other brokers that also use this system) reporting to be very helpful in reducing the amount of keying I have to do. Since my first broker statement was Scwab, I was very pleasantly surprised with the new reporting allowance.

[FEDUKE404]

Follow-up

It seems here that most responses are referring to the "work" necessary to key in multiple sales.

How many preparers are using the online direct download ( from the investment firm ) of the Forms 1099 tax data? A large number of investment firms now offer that service. Where does the data automatically "go" into a client file? How well does that work?

How does that option impact your decision re the original question?

FE