Phil Marti wrote:
- quote -

Yes, but who wouldn't want that additional information? ;-)

I suspect that for all the taxpayers who have over-reported basis,
there have been others who, not knowing better, paid a tax that was not
owed, when they got a computer letter from the IRS regarding an
unreported 1099-B. Mandatory purchase reporting might reduce this type
of tax revenue.

Beyond DRIP's, there are also the added reporting requirements for
employee stock purchase plans. Someone will need to bear the cost of
enhancing the systems of those brokerages which do not currently support
tax basis reporting. For every sale, there are often multiple
purchases, further split into long-term and short-term.

While a given brokerage should be able to track basis for its own
customers, let's hope they won't be responsible for the entire history
of a capital asset from initial purchase! Perhaps a type of "rollover"
statement when a customer departs would go a long way (Form 8606 on
steroids?).

Databases can generate data, fast -- commercial services that "reverse
engineer" purchase transactions for common stock transactions back to
Day 1, will generate many rows of data for possible inclusion on Schedule D.

While we're at it, <sarcasm> why not clean up that darned pension
reporting, too! I've always found the "taxable amount not determined"
box to be particularly pesky...</sarcasm
-Mark Bole

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <barmar-D09101.16051429022008[at]comcast.dca.giganews.com> , barmar[at]alum.mit.edu (Barry Margolin) writes:
| In article <BNCdnWv5fqSL7lranZ2dnUVZ_r6rnZ2d[at]comcast.com> ,
| joetaxpayer <joetaxpayer[at]nospam.com> wrote:

[...]
| > Well, I was thinking a bit differently, of course. If the broker is
| > reporting sale proceeds, it seemed logical that reporting cost would
| > improve collections. I'd imagine there's a lot of tax fraud in
| > overreporting cost basis, it would seem an easy thing to cheat there.
| > Would the cost really exceed the benefit?
| > JOE
|
| Many brokers and mutual funds already report this information to the
| customer, so it shouldn't be hard for them to report it to the IRS as
| well.

Fidelity appears to report the basis as the cost adjusted _down_ as
required by law (e.g., muni bond premium amortization) but not adjusted
_up_ as permitted for, e.g., accrued OID. Of course, they do not show
their work.

| There are cases where the broker doesn't know the cost basis, because
| they didn't perform the original purchase: transfers from other brokers,
| gifts, shares that the customer kept in a safe deposit box, etc. But
| when they know it, how hard would it be for them to include it on the
| 1099-B? They could require that transfers include the cost basis, as
| you suggest, but all old transfers would have to be grandfathered.

If this were to be implemented I would hope that the brokerage would
be required to compute the basis using the elections most favorable to
the owner. I would also hope that they would have to show their work.
I expect my hopes would be dashed...

Dan Lanciani
ddl[at]danlan.*com

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <BNCdnWv5fqSL7lranZ2dnUVZ_r6rnZ2d[at]comcast.com> ,
joetaxpayer <joetaxpayer[at]nospam.com> wrote:

- quote -

Many brokers and mutual funds already report this information to the
customer, so it shouldn't be hard for them to report it to the IRS as
well.

There are cases where the broker doesn't know the cost basis, because
they didn't perform the original purchase: transfers from other brokers,
gifts, shares that the customer kept in a safe deposit box, etc. But
when they know it, how hard would it be for them to include it on the
1099-B? They could require that transfers include the cost basis, as
you suggest, but all old transfers would have to be grandfathered.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
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- quote -

by long and short term, so that was pretty much what I needed.
Thing is, the gain wasn't the same as that reported on my paper 1099.
I called to ask customer service about it; they looked it up and found their
system had a third value for gain!
So, I have no idea what they reported to the IRS; the number on my 1099, the
number on the online 1099, or customer service's 1099. Hopefully they will
sort it out before 4/15.
The dividend and interest figures were consistant; that is something.

--
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"joetaxpayer" wrote:

- quote -

Not only cheating, but also the countless people who don't track basis and
just guess when they find out they should have.

I suspect that at a minimum we'll wind up with the broker reporting basis of
shares both bought and sold through the same broker.

--
Phil Marti
Clarksburg, MD

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"Mark Bole" wrote:

- quote -

Not to mention the psychological/political factor of the gummint having that
much information on hand about everyone.

- quote -

Actually, the payors already do this analysis. That's why you don't get
1099-DIV/INT/B statements for retirement accounts.

--
Phil Marti
Clarksburg, MD

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- quote -

Well, I was thinking a bit differently, of course. If the broker is
reporting sale proceeds, it seemed logical that reporting cost would
improve collections. I'd imagine there's a lot of tax fraud in
overreporting cost basis, it would seem an easy thing to cheat there.
Would the cost really exceed the benefit?
JOE

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

joetaxpayer wrote:
- quote -

This would mean reporting to the IRS every stock, bond, and mutual fund
purchase you ever make, including DRIP's, at time of purchase or
transfer. Given current reporting requirements, this would be perhaps
double, triple, or more than that in terms of transaction volume?

Then, there's the issue of purchases in retirement accounts vs.
after-tax accounts....for starters.

-Mark Bole

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On Feb 28, 9:55*am, "Taxlover" <taxlo...[at]yahoo.com> wrote:

- quote -

Fidelity is required to report the net proceeds (sales price) to the
IRS and you. If they also report the net gain on your own records,
you can calculate the cost basis as proceeds minus gain.

This is schedule D though.

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Taxlover wrote:
- quote -

Nope. The IRS gets the total sale details. If it doesn't match what you
claim, you are raising a very fast red flag. It's cost that brokers
don't all track yet that you are resposible to track on your own. If I
worked for the IRS, I'd suggest that brokers have to tack the purchase
price along with number of shares bought, and transfered shares have to
have this info follow. Just my two cents on that.
JOE
www.blog.joetaxpayer.com

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I meant to say "Schedule D", not C.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Taxlover" <taxlover[at]yahoo.com> wrote in message
news:JwCxj.5122$Sa1.5109[at]news02.roc.ny...
- quote -

Call up Fidelity and request the information you need. Many brokers make
available CSV files with infomation that can be imported in Excel and
formatted rather quickly in a maner suitable for attachment to Federal and
State Returns. Many also provide year end investment reports with the
information needed in the format required.



- quote -

No, IRS is looking to tie in gross proceeds which is the number reported to
them.


- quote -

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I just changed from Wachovia to Fidelity.

With Wachovia they divided up capital gains between long term and short term
and gave total purchase price and total sale price for each. I entered them
as two entries, Wachovia Long and Wachovia short,(using TaxCut) with "var-l"
or "var-s" as the purchase date and 12/31/06 as the sale date. I then
attached a copy of the detail I got from Wachovia to the Schedule C. I have
done that for about 6 years now and the IRS hasn't complained.

Fidelity doesn't give that information. They list all the sales divided by
long or short; but give only the total gain, not the total purchase and sale
prices.

Can I use the same system I used for Wachovia, but say purchase price was
"0" and the sale price was my capital gain? It comes out the same as if I
gave the actual total purchase and sale prices.

This might sound petty, but I have about 1000 transactions and having to add
them all up just to get information that is of no use will be very tedious.

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