- quote -

The original post did name the broker: "My broker BrownCo
reported those MMF trades to IRS. . . ."

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Thomas Healy wrote:

- quote -

Indeed. And please name the broker.

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"no[at]spamgourmet.com" <no[at]spamgourmet.com> wrote:

- quote -

File a Schedule D showing ALL the trades with a cost basis
equal to the sales proceeds. And change brokers.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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no[at]spamgourmet.com wrote:

- quote -

Money Market fund transactions are never reported on
Schedule D, since there is never a gain or loss (the NAV is
always $1). The ONLY form you should have received from the
broker was a 1099-DIV for the interest/dividends, and that
is reported on Schedule B. I don't know what form the broker
gave you (there is no 1099-D), but it may have been a
1099-B. This was inappropriate and should be corrected (read
cancelled) by the broker.

Alternately, I believe you can keep the IRS matching
computer happy by filing an amended Schedule D and 1040X.
Just enter same number for the Gross Sales and Cost Basis
values (as stated on the 1099-B). There will be no gain or
loss, and your bottom line will not change.

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In misc.taxes.moderated, no[at]spamgourmet.com wrote:

- quote -

If that became the norm, there would be a lot more schedule
D-1 continuation sheets being used!

It won't affect your tax, of course, but can you imagine one
line for each redemption? I wonder if you could just mark
them as all Various, but determining the
long-term/short-term of these zero gain transactions would
be a significant exercise. A few redemptions might even
involve both long and short-term acquisition dates. And
still no change in gain.

Let us know what happens.

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<no[at]spamgourmet.com> wrote:

- quote -

Try filling out a corrected schedule D showing the same M/M
fund "sales" shown on the 1099-B. Annoying, but it gets
them off your back. You could try attaching the Sch D to a
1040X or just send the Sch D along with a letter and a copy
of the IRS Notice.

The latter is the recommended procedure.

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

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Are you supposed to report each money market fund
transactions individually as if they are regular mutual fund
trades on Schedule D even though the NAV is always $1? My
broker BrownCo reported those MMF trades to IRS under both
1099-D and 1099-DIV to IRS. I just got an audit letter from
IRS saying I failed to report those numerous MMF "trades" I
made in 2003 even though I paid tax already on the taxable
interest under 1099-DIV. Any advice on how to straighten it
out?

Thanks!

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