Note to IRS

[erchess]

I am presently inclined to include the note below in the return for my Father. I wonder if anyone thinks the note can be improved upon or is unclear. In particular I wonder if I should point out that the sale of the fractional shares was involuntary.

Schedule D Part II

There was .8638 of one share of MIRWSA and.3903 of one share of MIR. In a reorganization of Murant Corporation, taxpayer received Murant Warrants, whole and fractional shares of MIRWSA and whole and fractional shares of MIR. Taxpayer sold the fractional shares on the date received. This is properly a long term sale because Taxpayer received the original shares of Murant Corporation in a spin off from Southern Corporation whose shares Taxpayer had held since before 2001.

[jainen]

What is the purpose

>>I am presently inclined to include the note below <<

What is the purpose of this note? What are you saying that you can't simply report on Schedule D without drawing attention to the return? If you are worried about the holding period, simply put the date acquired as the original Southern Corp acquisition. Or our old favorite, "various."

[erchess]

Good Question

I was indeed going to show the purchase dates as Various. If my Dad knew the date when he purchased the Southern Stock, I would use that date but I still would consider the note.

As for why the note, I know that one is not strictly required here. But wouldn't a properly written note reduce the chance of an IRS Letter concerning the entries in question?

I put up my post precisely because I recognize that I write too many notes and I wasn't sure about this one. I'd welcome more opinions if any kind people have time.

[George Boutwell]

Little Man in Crumpled Shirt with Green Eyeshade

>But wouldn't a properly written note reduce the chance of an IRS Letter concerning the entries in question?<

Like, you really think there is someone at IRS who CARES ?

I can see him now, poring over the returns as they come in.

Taking a moment to ponder the meaning of Murant. Perhaps looking forward to Southern Corp-fried chicken for dinner.

In fact, all that matters is whether the gross proceeds on Schedule D (as key punched by gals who get paid by the stroke, if you get my drift, unless you do it yourself, pardon the expression) match up with what the broker's computer fed the IRS computer a month or so ago.

Stop worrying. Life is too short.

[jainen]

George's eloquence

>>looking forward to Southern Corp-fried chicken<<

While I can't compare with George's eloquence, I share his viewpoint. No, erchess, I do NOT think that a properly written note (whatever that is) would "reduce the chance of an IRS Letter concerning the entries in question." The chance of an IRS letter concerning payment for fractional shares is about the same as me holding a winning ticket for last night's lottery. In fact, attaching a note would GUARANTEE that somebody at IRS examines your return, instead of the computer doing their data matching thing which probably has some threshhold well above the cash-in-lieu level.

[S T]

No note attachment

I am going to agree with Jainen and George, no note attachment.

No one at IRS is going to notice, an extra piece of paper that no one at IRS will know what to do with or interpret. If anyone at IRS is going to investigate at all, they will know that the stock had a spinoff or merger or something else. Just hope they don't lose the Schedule D, like they have in the past a few times!

We only need to make sure that the stock transactions reported on the Schedule D match what is on the brokerage statement, and other items that might not be reported on a brokerage statement.

Life is too short, so don't complicate!

Sandy

[Snaggletooth]

Don't Do It

Resist the urge to create a potential problem where none exists. I have filed literally dozens of schedule Ds where "various" was the only option and this has never created a problem.

I think perhaps you have a honest reputation and are attempting to render your father's return as honest as an "open book." If this is a paper return, you will succeed only in creating the need to spend extra time and attention to this document, and the processor will be either annoyed or confused. It will not be appreciated as an accommodation to honesty and openness.

While you obviously have admirable character traits, regard the jobs of the IRS processors from their perspective. Only if selected for audit will "various" create questions, and it does not create any questions that wouldn't arise anyway.

Stay under the radar whenever possible.

Regards, Snag

[jainen]

a meaty slap

>>it does not create any questions<<

Dang! I wish I had waited longer before posting. Now I'm stuck right in the middle of agreeing with EVERYBODY.

Hey, erchess, I've changed my mind. Second time today! (The first was that Old Jack thing, even if nobody believes me.) This is your own dear dad's return -- you can't expose him to the chance that there actually is a Little Man in Crumpled Shirt with Green Eyeshade.

But if you don't mind my saying so, that note you wrote needs a little more pizazz. That bit about involuntary might help, but I think you could do still better.

Actually, I wasn't exactly sure what Murant was, so I googled it and found just what you need to battle the IRS -- Hurad's Blade. I suggest you attach the following note instead. I'm sure they'll get the message.

"The snakey thing drew very close, and Murant kept his crouch. At the last moment, even as he could smell the insidious stink of its hell-spawned venom, he thrust body and blade upward. Hurad's Blade sliced into the soft flesh at the base of the demon's jaw. Mouth still agape, lusting for a vicious bite, its head flew to the dwarf's left while the body flopped with a meaty slap to the stone floor on his right."

[erchess]

Thanks to all who wrote

I took the note out. I have printed the Return for my Dad to Eyeball and I have made marginal notes in what is tentatively his file copy to help answer questions I know he will ask. We will discuss it tomorrow and when we are in agreement I will electronically file the returns and if I have made changes he will shred what I just printed and I will print a file copy for him and one for myself. I use the PIN method and all my pins get accepted so I won't need to print anything to mail in and even if I do that will be my responsibility, not his.

You may be curious about where my note writing habit comes from. It comes from Dad. When I was growing up he did his own returns and every year he had several notes. I remember one in particular where he admitted that his basis in a stock was based on his best memory of what it was worth when he inherited it ten years before. The documents from settling the estate were in storage and he would get them out if anyone really cared. He was particularly fond of admitting that he had no receipt or canceled check to back up a charitable contribution but he clearly remembered making it. He frequently had the IRS disagree with him and in some of these cases he had to pay additional tax plus interest, but he claims that he has always been able to talk his way out of penalties and I am sure he is right in claiming that the IRS has never accused him of Fraud. He attributes these good things to his notes.

By the way, my Dad is not a hillbilly or homespun type. He has a degree in Economics from Duke University.

A few years ago I moved from a part of NC where there was little demand for returns for other states to a part where at least every other day I needed to do a return for SC. On my first SC return, I made a mistake. Within days I found out that I had misunderstood some point so per company policy I prepared an Amended Return and called the client to explain things. I recall that he was not terribly unhappy so either he got money back or he paid very little. In the "Explanation of Changes" I said something to the effect that the error resulted from my unfamiliarity with SC tax law, which I would work on. Within twenty days I received SC Package X in the mail with a cover letter from the clerk who had processed the return. I thought highly enough of that clerk that I wrote to the Governor of SC to commend the employee. The Governor wrote back to thank me.

[Black Bart]

Go for it.

I am presently inclined to include the note below in the return for my Father.

I must say I was mightily tempted to join the chorus, say "forget about it," and dismiss it as triflin' and inconsequential. But, if you're dedicated enough to get the governor involved in other matters, then who am I to say that it's not important. Besides, I'll bet everybody on this board has been accused of "detail overkill" at one time or another -- it's one of the traits that got us into this business in the first place.

I wonder if anyone thinks the note can be improved upon or is unclear.

There's no way I could improve on something to which you've given much thought. And it's clear as a bell.

In particular I wonder if I should point out that the sale of the fractional shares was involuntary.

Do.