IRS tax return-2005

You need Schedule D to document the basis and calculate the taxable gain.

-- Phil Marti Clarksburg, MD

"jIM" wrote

Probably you don't need to go to that expense. If you can't make the changes yourself, seek out a CPA or EA (we're not all on vacation in Tahiti) to help you.

Schedule B, D and 1040X for starters. The additional income might impact other forms or schedules, like Schedule A, tax credits, etc. Anything else that changes because of the newly reported income should be attached as well. Don't forget the state impact of this new income.

-- Paul A. Thomas, CPA Athens, Georgia

you need to file an amended return to report the stock sale & its related basis as well as to report the omitted dividend and don't forget to amend your state tax returns too

no idea if turbo tax can do amended returns but they almost certainly can't be efiled

___________________________________

-----> real address on hobokeni or hobokenx

You received a CP2000 "underreporter" notice.

If you still have your 2005 copy of TurboTax loaded onto your computer, open your 2005 tax return and enter the two unreported stock sales into the capital gains worksheet. TurboTax should recompute your 2005 tax using capital gains tax rates. TurboTax also should automatically fill out a Form 1040X. I recommend you not send the Form 1040X to IRS but you should print out the Schedule D and the Dividends and Long-Term Capital Gains Tax Worksheet. Prepare a short letter acknowleding that you failed to report the two stock sales shown on Forms 1099-B. Indicate in the letter that you have recomputed your 2005 tax with the net gains from the stock sales included and that the applicable amounts are shown on the attached Schedule D and the Dividends and Long-Term Capital Gains Tax Worksheet. Ask IRS to accept your explanation and to assess the tax indicated in your attachments. Keep a copy of everything you send to IRS. Allow 60 - 90 days to hear back from IRS once you've responded. If IRS agrees with you and closes the correspondence audit using your figures, you don't need to do anything except pay the additional tax. If IRS indicates that they intend to proceed with the proposed assessment shown in the CP 2000 letter you received (about $1,700), ask the IRS Taxpayer Advocate to get involved.

The notice should have provided a contact name and address so that you can provide basis information to calculate the correct tax. If the tax has already been assessed and it was a collection notice, you can request audit reconsideration.