Schedule D vs Filing a 1040A

Yes.

You are very confused. So odd when taxes are invovled . Stock sales go on Schedule D of the 1040. Itemized deductions (charitable, state/local tax) go on Schedule A of the 1040. Since it sounds like you've not itemized before, make sure that your total itemized deductions are more than the standard deduction. The telephone excise tax credit goes on line 71 of the 1040.

-- Phil Marti Clarksburg, MD

snipped-for-privacy@comcast.com (RichT) posted:

If you've made a stock sale -- and, presumably, received a

1099-B -- you must file Schedule D in order to record your cost basis, and "prove" the amount of the loss. Otherwise, the entire proceeds shown on the 1099-B will be considered as income. Also, filing Schedule D has nothing to do with deducting charitable contributions or taxes paid -- which would be itemized on Schedule A. The telephone excise tax credit refund is also unrelated, and can be taken no matter which forms you use to file. It seems you have a basic misunderstanding, and you should seek some clarification -- either by consulting a professional preparer, or taking advantage of one of the many "Free Tax Help" options available. (VITA or AARP TaxAide, for example.) Bill

You're not making sense -- you *can't* take charitable donations and the sales tax deduction on a 1040A. To claim them you have to file a 1040 (with a Schedule A). As for the stock sale, unless you report it on Sched D, the IRS will assume you have a *gain* for the full amount of the proceeds (i.e. absent a Sched D, the IRS will assume zero basis).

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

The IRS receives a copy of the 1099-B. If you don't report the sale, the IRS sends you a nice letter wherein they figure your cost basis as zero and the rest as pure profit. And since they will take their time getting around to sending you the letter, they will add in penalty and interest as well. So save yourself some trouble and file the Schedule D.

Do you mean that you want to file Form 1040 Schedule A - Itemized Deductions? Form 1040A is different from Schedule A. Form 1040A is a short tax return form that does NOT allow you to itemize deductions for contributions, sales tax, etc. I don't understand why you think that reporting a tiny loss on a sale of stock would prevent you from itemizing deductions. You can do both by filing Form 1040 with Schedule A for your itemized deductions and Schedule D for the stock loss. The itemized deductions and the stock loss both help to reduce the amount of tax you have to pay. You can get the telephone tax refund no matter what form you file, regardless of your income, loss, or deductions. If you are confused about tax forms and how to report your income and deductions, you should seek professional help. Bob Sandler

Thanks all for your responses. And perhaps I am a bit confused but have been itemizing since 1980 with or w/o these fandangled tax s/w programs just not much with stocks and also not being able to itemize. The rule I did not know was that they would count it all as income because no cost basis was established. But that makes sense...Good point. My angle was as silly as it may sound, is that if I didn't need to report the few $$ loss and since I don't have enough deductions to itemize then I can't take advantage of some of the other goodies that are on schedule A but that are also (but not the telephone tax) on 1040A as well. As it turns out I make too much for that form any way. Soooo, as usual they got me coming and going... Thanks again for clarifying, Rich

You still seem to be very confused. You say you have been itemizing since 1980 and in the same sentence you say "...and also not being able to itemize". This doesn't make sense.

The 1040A form is just a simplified version of the 1040 form. It does not give you any advantage over the 1040 form. If you qualify to use the 1040A form, it can reduce the amount of paper you have to print and send (there is no advantage if you e-file). Exactly why do you seem to think that there is some other advantage of using the 1040A over the 1040? Just what are the "goodies" you think you can get by filing a 1040A instead of the 1040? BTW, Line 42 on the 1040A is where you put the telephone tax credit.

--

-Ernie-

The reason it doesn't make sense to you did not read and comprehend the rest of my post. Since you snipped it I'll leave it upto you to determine what I said

For me and perhaps thousands of others, yes it does, see below

Yes one of the 'goodies' I refered to and you're right, I missed that during my quick scan of the form But

It appears that you are the one that seems confused on the other issue. I'll try to explain. Since my deductions allowed on Sch A do not come to a certain level I must take the Std Ded. It's close but no cigar. I have a fairly large contribution for charities that are worth $100's but they are disallowed becuase I cannot use Sch A. Form 1040A allows the charitible contributions at least to the $500 level, but since I need to claim my (very) insignificant cap loss on Sch D I can't use 1040A. In fact loss/gain must be reported to establish basis as was pointed out in an earlier post.....In this case the 1040A form would give me the advantage, albeit only a couple a hundred bucks. One of the problems with striving to become debt free is that if you trade stocks you will never be able to take a tax advantage of giving stuff away to the less fortunate. Wierd! Next time I will be able to use 1040A because I'll be a bit more smarter about when I trade my company's stock awards.

Form 1040A does NO SUCH THING.

What line on 1040A are you referring to?

The only way to take *any* charitable deduction is Schedule A of Form 1040. Further, Form 1040 lets a taxpayer do anything they can do on one of the "shorter" forms.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

A limited charitable deduction without itemizing has been discussed for several years, but never passed. Where on the

1040A do you think it is allowed?

-- Don EA in Upstate NY

Where did you find that? What line of the 1040A would you put it on? The IRS is very clear as to what form is required to claim any charitable deduction:

"Form 1040 required. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. The amount of your deduction may be limited if certain rules and limits explained in this chapter apply to you."

I would be very suppressed if there is some way to add a $500 charitable deduction to a 1040A instead of using a 1040 and Schedule A. If I am wrong, I am sure that others will correct me, but I don't think there are any freebees for those who don't have enough deductions to itemize.

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-Ernie-

You can elect to itemize if you want to. I do it all the time, because Oklahoma's standard deduction is so low compared to Federal.

*boggle* There's no $500 charitable contribution allowed on the 1040A. Where exactly are you proposing entering such a thing on the 1040A? Phoebe :)

By taking the standard deduction you are allowed to deduct even more than if you deducted all your contributions on Schedule A.

Where on Form 1040A can you deduct $500 of charitable contributions?

I have just throughly exeamined Form 1040A for 2006 and I can assure everyone that there is no place to deduct charitable contributions in any amount. There is, however, a line for claiming a retirement savings contribution credit which if, perused briefly, can confuse readers, especially if they lock on the term "contribution". The credit is allowed if the taxpayer has limited income and makes a retirement contribution: 401K, 403B or other retirement plan. Taxpayers still must use Sch. A with Form 1040 to deduct any charitable contributions. Linda Dorfmont E.A., CFP, CSA