Thankful for 1099-B changes made a while back

[Rapid Robert]

I am so glad I don't have to deal with reporting 1099-B transactions the old fashioned way anymore. I remember when I first started at H&R Block we could charge $3/line item on Schedule D and D-1 (no 8949 back then). So sometimes you could just keypunch away late at night and increase your commission that way. (Not that I ever did that).

Nowadays with basis reporting for most transactions, I just report directly one short term and one long term summary on Schedule D and am done with it. What a smart move, I wonder who it was who came up with that idea, to require broker basis reporting, phased in over 3 years?

Now if only we could get colleges and universities to finally conform to the law passed several years ago for 1098-T reporting. Oh wait, who is it who keeps on letting that slide?

[Uncle Sam]

Yes -and isn't it the brokerage statements that come up with CORRECTED statements a month after you've prepared AND FILED returns for clients already?
Isn't it the limited partnerships with K-1 reporting that take their time all tax season long (even with 1065 filing moved up to March 15th) to send their stuff out the last week before the filing deadline?
Isn't it the pension custodians that continually screw up the coding of pension distributions in Box 7 that we as preparers need to act like Sherlock Holmes to backtrack and investigate how the transaction actually was meant to be handled?

So I guess we should be thankful for a lot of technological advances that make our lives as practitioners living hell?

Is that what you prefer Rapid?

OH - and I guess you'd prefer all the details we need to supply for non-cash contributions over the limit, or the questions on on the credits where we are guarantors to IRS for due diligence?

[Gretel]

I am lost but that is nothing new.

[Twin Turbo Z]

Yes -and isn't it the brokerage statements that come up with CORRECTED statements a month after you've prepared AND FILED returns for clients already?
Isn't it the limited partnerships with K-1 reporting that take their time all tax season long (even with 1065 filing moved up to March 15th) to send their stuff out the last week before the filing deadline?
Isn't it the pension custodians that continually screw up the coding of pension distributions in Box 7 that we as preparers need to act like Sherlock Holmes to backtrack and investigate how the transaction actually was meant to be handled?

So I guess we should be thankful for a lot of technological advances that make our lives as practitioners living hell?

Is that what you prefer Rapid?

OH - and I guess you'd prefer all the details we need to supply for non-cash contributions over the limit, or the questions on on the credits where we are guarantors to IRS for due diligence?

You got that right. Got a client who received a 1099R for a brokerage transfer (non re-portable), coded 7 !! The brokerage refuses to correct it. Have to do it on our end.

[Rapid Robert]

So I guess we should be thankful for a lot of technological advances that make our lives as practitioners living hell?

Is that what you prefer Rapid?

OH - and I guess you'd prefer all the details we need to supply for non-cash contributions over the limit, or the questions on on the credits where we are guarantors to IRS for due diligence?

I'm not quite sure what you are referring to here, regarding my original post about basis reporting on 1099-Bs. I have a small practice now, I have been doing taxes for well over a decade including some time at H&R Block, and I don't recall that I ever received a 1099-R with incorrect coding in all those years, or if so it must have only been once, and easy to fix. I must just be so lucky, I guess.

It's interesting how preparers reporting these types of problems always determine that the problem 100% of the time is with the firm issuing the 1099-R, never the taxpayer.

[JohnH]

My clients never make mistakes - it's ALWAYS someone else's fault.

[Lion]

And, lots of wash sales.

[Twin Turbo Z]

The issue I have with the incorrect 1099R code was acknowledged by the issuing company. They just flat out refuse to correct it. No big deal, I will type up an explanation and attach a pdf of the 5498 showing the transfer. Its just the point. If I issued a 1099R or any 1099 with the wrong code or amounts, I would fix it !!! Customer service flat out sucks now a days !!!

[Uncle Sam]

I never implied it was always the broker or pension custodian's fault.

One situation this season - 85 year old client withdraws 100% of funds from an IRA account, and within the prescribed 60 day period (within 10 days to be exact) rolls over all but $ 25,000 of a $ 130,000 IRA into a different brokerage account. The first account showed a 1099-R for gross and taxable of $ 130,000. Now if I weren't questioning the client on it I would have had her pay tax on $ 130,000, when she only got $ 25,000. (In addition - there was NO Federal withholding tax at all - so she owed money this year to IRS AND NYS (NYS doesn't tax the 1st $ 20,000 of IRAs, pensions and annuities).

[Uncle Sam]

My whole point is - very often these clients will do things in disguised ways that don't initially make sense simply by reading the information you're given - so you need to play the role of investigative accountant to determine the proper input, or get the form reissued/corrected properly.
I also had a 1098-INT form from a client who refinanced a mortgage, where the bank entered the wrong Social Security number of the borrower - where the client has had the original mortgage with the SAME bank for many years.
So that the preparation work isn't as easy as it used to be simply by taking short cuts in using lump sum lines for brokerage account information with multiple entries - that only cuts down key strokes - but the data needs to be submitted to IRS somehow - by either pdf'ing or 8453'ing the detail sheets.

[Rapid Robert]

So that the preparation work isn't as easy as it used to be simply by taking short cuts in using lump sum lines for brokerage account information with multiple entries - that only cuts down key strokes - but the data needs to be submitted to IRS somehow - by either pdf'ing or 8453'ing the detail sheets.

I completely agree that reduction of tax prep tasks in one area can be more than offset by new or changing complexities in other areas, or increased error rates.

But to your immediate comment above -- I was actually talking about the scenario where you can bypass Form 8949 altogether and just enter directly on Schedule D -- basis reported to IRS and no adjustments. That avoids need to attach any detailed PDFs or mail in paper copies (and there are anecdotes that the IRS doesn't really enforce the rules for attachments to Form 8949 for "M" code entries).

[Burke]

So that the preparation work isn't as easy as it used to be simply by taking short cuts in using lump sum lines for brokerage account information with multiple entries - that only cuts down key strokes - but the data needs to be submitted to IRS somehow - by either pdf'ing or 8453'ing the detail sheets.

Simply not necessary for the pdf's and 8453's on stock transactions. Most preparers have not done this in several years. I haven't. Entirely superfluous and only needed in case of audits, where the TP would have the brokerage statements to document the inputs.