The brokerage statements are coming in fast and furious now. Does the IRS actually checks the amounts on the statement to the tax return? Just wondering.
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Their computers are matching the "Covered" transactions.
Plus they've also been tying back to the "Total Proceeds" on the 1099-B for a long time."The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
zeros - are you talking about Corrected brokerage statements?Comment
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Later Appointments
The track record for timely notifications from brokerage houses is miserable.
My clients never know when they are coming. And they never know whether they are right, as some of them result in corrected statements. Some of my clients are not even making appointments with me until late in March. This is causing a traffic jam this time of year.
To make matters worse, many of my clients are allowing the brokers to make buy/sell decisions for them. Brokers approach investors with this speech that their expertise enables them to make better choices, so the 1099-Bs and DIVs have hundreds (or even thousands) of transactions. Of course, contrary to what has been told to them, the brokers are not really sitting in their office and making these decisions - the decisions are made at high levels at brokerage companies and mashed down upon investors who have consented to this. What's worse, the performance is arguably not any better than the simple investor when fees are deducted.
My usual approach for these with hundreds of transactions is to simply copy the document, send to IRS under Form 8453, and report summarized totals on the tax return.Comment
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I've never seen a brokerage house or individual financial advisor consistently beat the Total Stock Market Index, especially on an after-fee basis. Sure, some of them have a lucky run for a year or two, but eventually everything lines up with the cold math of reversion to the mean. That's a statistical certainty - it never fails. But people are suckers for their publicity, and apparently there's an inexhaustible supply of thrill seekers out there."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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ProSeries has a nifty little feature that you can attach a PDF of brokerage statement to an e-filed return. If it's more than several lines I just enter the totals of ST covered, ST non-covered, LT covered, and LT non-covered and send the PDF. I've been doing that for several years and have not had any requests for more info from IRS.Comment
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Now you don't even have to send the covered to the IRS if you have no adjustments.Comment
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I'm still trying to get this sorted out in my mind. Covered can now be entered directly on the Schedule D if there are no adjustments AND there is only one brokerage statement - correct? But if there are multiple brokerage statements, then a separate entry must be provided for each brokerage statement with a notation referencing the name of the brokerage. Can that simply be a supporting schedule tied to the Schedule D, or must it be on the 8949?"The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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In my software, everything goes on the 8949 and carries to D. I don't think we can even input directly to D.Comment
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I input the non-covered items individually. With the new rules, they are getting more limited each year. I really only have 3 clients that have more than 10 items to enter and they pay me enough that I have no problem entering the data. Grand total between them is probably 2 hours and I do it on a Sunday morning. If I had more I'd do the pdf attachment thing. I don't know of a software package that doesn't allow that at this point.
For us, the Vodafone spinoff of Verizon being labeled a dividend are our only real corrected issue. I have had multiple corrected 1099s this year on that one item and clients are royally upset at the tax implication.Comment
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I had a client w/ the Vodafone large dividend. Are you saying it was not supposed to be a dividend?Originally posted by Roberts View PostComment
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Which software?Originally posted by Burke View Post
Does it not enable you to open a data input screen which transfers the info directly to lines 1a and 8a on the Schedule D?
Maybe it has a hard-to-find check box or other option..."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Verizon & Vodafone 2014 stock issues
I'm arriving a bit late for this party, but as I recall the Feb 2014 Vodafone/Verizon event included both a cash payment and a stock payment.Originally posted by kathyc2 View Post
In most similar situations, the cash payment becomes taxable income immediately and then for the old/new shares there is an adjustment of the remaining cost basis.
It is important NOT to get the pieces confused. Most companies offer excellent worksheets (contact Shareholder Services) to walk you through the process.
In the meantime, this might explain further:
EXCERPT: "Further to the share consolidation, Vodafone shareholders have received 0.0263001 new Verizon shares and US$0.4928005 in cash for every pre-consolidated Vodafone share held."
(I actually own both stocks within a brokerage account, but my "own" tax prep work is being delayed well past 04/15. At some point I will research the matter further. I also am able to see "both sides" of the reorganization within a single brokerage account.)
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