1099-B Question

[BP.]

gain/loss

I guess what I found troubling were these statements: "How can there be a loss and proceeds (from the sales of stock?)" and "The $48,000 in proceeds looks like they made out." Your client may have received $48,000 from the sale of stock, but they may have purchased the stock for $98,000, so that's a loss of $50,000. The proceeds alone don't determine gain or loss.

[Unregistered]

I would also like to point out that researching and course work cannot give the knowledge to prepare taxes.

I wouldn't want to go to a surgeon who had studied alot but never observed or assisted in surgery. You need the practical hands on experience.

[abby]

I found a spot titled "Details of Short & Long Term Gain or Loss" where the opening trade date and closing dates are listed, as well as the sale proceeds and original cost and then also the loss or gain. There looks to be an overall loss of $8500.

What I am confused about is in a separate area, under 1099B, it lists the Gross Proceeds less commissions for each stock and the numbers are adding up to $48,000.

How can there be a loss and proceed for each stock (they are exactly the same stocks listed I checked the reference numbers.

What gets reported where? What are they actually taxed/not taxed on?

I believe your question has been answered, but I wanted to clarify why there are two forms - the 1099-B is the official IRS form, and only the gross proceeds on the 1099-B are reported to the IRS.

The second page is a courtesy from the broker showing their record of how much was paid for the stock and when they stock was purchased. This information is not reported to the IRS, and, often is not supplied by the broker. The taxpayer should be keeping track of when and for how much they purchased the stock, and will have to help you find this information if they've switched brokers or otherwise have a broker that doesn't perform this courtesy.

Barring this cost information entered on the return by, you, the preparer, the IRS will eventually expect tax paid on those gross proceeds - and, as you can see in this case, the taxpayer actually has a loss once their cost is deducted! Encouraging your clients to keep track of their costs (and with a mutual fund that would include reinvestments) is a very good idea.

[Unregistered]

That was uncalled for an inappropriate. I am a young mother of 2 young children and I do this so that I can stay home with my kids. I took completed a 12 month tax course in 3 months and averaged 95% over 12 exams. I haven't dealt with this before, so asking for direction so that I can do right by my client seems to me to be a smart thing.

Unregistered, hmm, too bad you won't put your name out there, must be a reason!
JERK

This is a different unregistered but I hear you. DO NOT worry. You will get it. I would also suggest search on google and look at "thetaxbook". No body was born expert. I would like to encourage you and this board is EXCELLENT. Good luck and congratulation for starting a good business.

[Kurly]

1099b

Hang in there not all preparers are as smart as they think. If you can dream it you can do it. Never be afraid to ask questions. Many Many years ago when I was much younger the class I was in the first day the instructor said" I want you to remember only one thing from this class, Where to find the information" Also remember to all. Not anyone person is as smart as all of us.

Good luck

Kurly