David Martin wrote:

- quote -

They don't.

- quote -

They don't.

- quote -

According to the IRS instructions for Box 1b, they should "Enter
the portion of the dividends in box 1a that qualify for the 5%
and 15% capital gains rates. Include dividends for which it is
impractical to determine if the section 1(h)(11)(B)(iii) holding
period requirement has been met."

- quote -

I haven't seen one yet but I would guess that if you understate
the qualified amount, they won't care. If you overstate the
amount and the overstatement creates a tax difference that is
above the magic threshold, you will hear from them.

--
Alan
http://taxtopics.net

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David Martin <quicksailor[at]yahoo.com> wrote:

- quote -

The broker can send out a coprrected 1099 around Mmrch 1,
but I think this may be part of a technical corrections
bill.

Either the House or Senate finance committee wrote to the
IRS to ask the IRS to act as if the technical coreections
bill was law.

They do this a lot. Congress is taking the heat off the IRS
and asking them not to follow the letter of the law, but the
letter of the law as it is likely to be.

The brokers software might not handle all this qualified
dividends too well, and the technical corrections might
help, and it is very possible that the brokers will be
issuing corrected 1099s after folks have already filed.

If angry taxpayers write their congresspeople to compain
about having to correct their 1040s, Congress might grant
relief from having to correct a 1040 if some de minimus
amount is invlolved.

- quote -

They can only report what they know, and ultimately it is up
to you to report it correctly.

- quote -

Too soon for us to know, but even if they kick it out, all
you have to do is send in proof if they ask about it.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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I recently received my 1099-DIV from my broker and noticed
that the brokerage company has divided my dividends into
qualified and ordinary dividends for me, rather than relying
on me to do it myself. Had they done this correctly, it
would have been fine. But there seem to be a few cases where
the brokerage cannot make the right decsion, which leads to
my questions;

1) If I buy a stock in late November and get a dividend in
December, how does the brokerage know if the holding period
requirement has been met if 120 days have not yet passed
from the purchase date to the day they send me the tax
form?

2) If I get a dividend on a stock and then transfer the
stock to a different brokerage, how do they know if I have
held the stock long enough for the dividend to be qualified?

3) In cases such as these where the brokerage cannot know
for sure which category to put the dividends in, what are
they suppossed to do?

4) If I put the dividends into the correct category when I
file rather than the category assigned by the brokerage,
will the IRS computers complain?

-David, quicksailor[at]yahoo.com

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