Differing 1099s

What kind of 1099 are we talking about? I'm going to guess it's the 1099-B portion of, perhaps, a combined statement, and these breakouts you're talking about are somewhere in the information provided. If I'm wrong, ignore this message and please clarify exactly what you're talking about.

No. The only thing regarding gain or loss reported to IRS is proceeds, and the only thing regarding holding period is sale date. He's blowing smoke.

I don't suppose you have your purchase confirmations for the securities you sold? That's what you should use in preparing Schedule D, and that's what IRS is going to want to see in an audit.

That's what's supposed to be on a 1099-B -- gross proceeds, that's it. It's the taxpayers job to figure basis, holding period, and gain/loss. However, if you look closely at what you got from Fidelity, you'll see that there are actually multiple 1099-B "forms" on that packet you got -- a separate 1099-B for every single sale transaction you made.

The 1099-B numbers are what goes to the IRS. I would expect that whatever system at Fido that generated the paper 1099-Bs would send the same thing to the IRS.

That's good. It indicates that proceeds (which is what is reported to the IRS) are consistent in Fido's systems.

So what you're saying is that the supplemental info that Fido sent you with your 1099-INT/DIV/B/etc. has different cost basis info than what Fido has in its online realized gain/loss reports?

-- Rich Carreiro snipped-for-privacy@rlcarr.com

I suspect he is talking about mutual funds. If so, the average basis data provided by Fidelity should be sufficient.

Well, actually I have a dozen accounts, each of which averages 100 stock sales each year; so a total of over a thousand sales. What I have done in the past is to list each account's long and short term transactions on the schedule D as a single item and attach a photocopy of each statement to it. I've done that for the past 6 years, and my accountant used to do it that way for many years before that.

I don't get purchase confirmations, as they are all managed accounts, but I don't know how I could keep track of them anyhow. Isn't that what Fidelity is supposed to be doing on the 1099? On top of my accounts my kids probably have an equal number; it would literally take several hours a week to track everything. I don't wan't to sound foolish (or be foolish, for that matter) but does the IRS really expect you to keep track of each transaction independent of the brokerage report?

Well, there were over a hundred entries on it and my eyes glazed very quickly when I tried to compare them, but either the cost basis was different between the two, or they split the long and short term differently. But it is a good question, so I tried to compare them tonight to find out what the discrepency is.

The ones online now say "Corrected 3/4/08" and agrees with the printed version dated 2/28/08! So whatever the problem was, it seems to be cleared up now.

Not from a tax law perspective. All the law requires is that they report the nature of the security, the sale date, and the proceeds. It's the taxpayer's responsibility to provide the rest.

I'd suggest you check your agreements regarding the managed accounts to see what additional commitments Fidelity has made regarding the issue. From what I've seen in the papers there's growing interest in assessing the accuracy of Schedule D reporting, and if IRS decides they want to check yours it won't be Fidelity they get in touch with.