What do I need to send in in support of a schedule D?

I have 4 investment accounts, each with 30 or 40 sales that need to be reported on schedule D. I enter "Account 1 Short" "Account 1 Long" etc. and attach copies of all the transactions in case the IRS is interested.

I know that is more than is necessary since I have an accountant do my taxes every few years when there is something complicated and he lists the accounts the same way I do, but doesn't include any copies of the transactions. But I prefer to overdo things rather than take a chance of making them look deeper.

This year all the transactions are on 1099-B reported directly to the IRS, so including copies of the transactions seems redundant; even for me.

What do you think?

Reply to
Toller
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Are you sure hat all transacions are reported to the IRS?

Only if you bought stock in 2011 and sold it in 2011 would that be reported.

Your idea to attach the pages of trades and say see attached might work, if the broker's statement is substantially the same as form 8949.

Reply to
Arthur Kamlet

The transactions have always been on the 1099-B that the brokerage sends to the IRS. You never needed to send them to the IRS before, you still don't.

Reply to
Barry Margolin

Maybe I am confused. The broker issued me a 1099B which is everything sold in 2011, whether it was bought in 2009, 2010, or 2011. I thought that was also submitted to the IRS. Is that not correct?

It just means photocopying a bunch of stuff if it wasn't submitted (or if I should include copies anyhow), but it would be nice not to. But if the 1099B is not submitted then I will attach copies for sure.

Reply to
Toller

bought in 2009, 2010, or 2011.

should include copies anyhow), but it would be nice not to. But if the 1099B is not submitted then I will attach copies for sure.

You are confused. The 1099-B information which is submitted to the IRS is only the sales proceeds with the exception of certain trades which fall under the new cost basis tracking rules. So, if you don't mind paying tax on all of your sales proceeds at regular income tax rates, feel free to just send a copy of the

1099-B as support for your Schedule D. On the other hand, if you're like most of us who only want to pay tax on our gains, and preferably at the reduced capital gains rate, *you* need to provide the cost basis information for your sales.

Ira Smilovitz Leonia, NJ

Reply to
ira smilovitz

But you don't need to send the transaction documents to the IRS for this. You just fill in the cost basis on Schedule D, just as you always have.

I think the problem may be that the OP wasn't clear on just what he has been sending to the IRS. Was he sending copies of the original purchase receipts, to substantiate the cost basis reported on the schedule? IRS doesn't require this, they generally believe what you report. If you get audited, they may want to see the receipts at that time. I suppose it's possible that including the receipts could prevent an audit, but I wouldn't be surprised if they toss them.

Reply to
Barry Margolin

reported on schedule D.

transactions in case the IRS is interested.

Don't forget to take account of wash sales. You can still eFile you return but attach form 8453 with the last box form 8949 checked, and Schedule D filled out similarly to what you have above. You then mail a copy of your trades with the same columns as on form 8949 to the Austin Service Center.

What trading companies do you use? I suspect most of them allow you to import trades and even 1099-DIV and 1099-INT into popular tax programs. Many will also generate a csv file (which is a text file with the fields separated by commas, one row per line) which you can import into your program.

For example, at Ameritrade go to

formatting link
You need to log in to see this page, but it gives you the steps to set up a PINnumber, and your program can import data using 12345678@amtd and entering thePIN, or there might be other options such a feature from your tax program to login to the website and download data. They give instructions for Turbotax, H&R,TaxAct. They also show where to generate a csv file (which can be opened inExcel) with wash sale adjustments, and I suspect most major programs will beable to import this.

Reply to
removeps-groups

Okay, but I am still confused. Isn't the 1099-B new? I thought the brokerage didn't report capital gains to the IRS until this year?

Reply to
Toller

reported on schedule D.

the transactions in case the IRS is interested.

taxes every few years when there is something complicated and he lists the accounts the same way I do, but doesn't include any copies of the transactions. But I prefer to overdo things rather than take a chance of making them look deeper.

IRS, so including copies of the transactions seems redundant; even for me.

I think you have to separate all the trades into the categories required for Form 8949. Copies of statements are not acceptable anymore.

Reply to
D. Stussy

1099-B has been around for years. They just added this new information to it. But the brokerage only has to calculate the gain if the shares were purchased in 2011 or later, since that's when the law went into effect.
Reply to
Barry Margolin

was bought in 2009, 2010, or 2011.

should include copies anyhow), but it would be nice not to. But if the 1099B is not submitted then I will attach copies for sure.

The first line of my 1099B is: American Express 025816190 01/30/09 05/18/11 40.000 2,039.94 676.80 1,363.14

I bought 40 shares of American Express CUSIP 025816190 on 1/30/09 for $676.80 and sold it it on 5/18/11 for $2,039.94; a long term gain of $1,364.14.

There are about 40 such lines, covering everything sold in 2011. At the bottom it totals the LT and ST gains.

That is everything the IRS wants isn't it? On my Schedule D I am listing it as two entries for the account LT and the account ST. The form says it is being submitted to the IRS. So, do I have to send them a copy along with my return, or will they already have it?

Reply to
Toller

was bought in 2009, 2010, or 2011.

I should include copies anyhow), but it would be nice not to. But if the 1099B is not submitted then I will attach copies for sure.

and sold it it on 5/18/11 for $2,039.94; a long term gain of $1,364.14.

Read the text that appears either before or after the list of transactions. It probably states that the cost basis information is *not* being provided to the IRS even though it appears on the paper you are looking at.

Ira Smilovitz

Reply to
ira smilovitz

I doubt that the thing you are reading in a 1099-B; it sounds more like a gain/loss report. The clue - a 1099-B has no data field for gain or loss.

And this year, for the first time, the 1099-B that the brokerage sends to the IRS does not have to be identical to the one it furnishes to your. The one you get may have basis information for non-covered transactions; the one the IRS gets probably will not. The clue is box

  1. If it is checked, the transaction is a non-covered transaction and box 3 (the basis) may be blank. (Or may have a number on your copy and be blank on the IRS copy.) If that is too subtle for you, next year's
1099-B (already released on the IRS website) will have an explicit check box to indicate if the basis printed on the form is being sent to the IRS.

Don EA in Upstate NY

Reply to
Don Priebe

My understanding is that statements are still acceptable, but they must conform to the new Form 8949 format. That is, separated into type A, B, and C and short-term and long-term.

Ira Smilovitz

My understanding is that statements are still acceptable but they have to match the requirements for the new Form 8949. That is, the trades must be sorted into short-term and long-term as well as Type A, B, and C.

Ira Smilovitz Leonia, NJ

Reply to
ira smilovitz

conform to the new Form 8949 format. That is, separated into type A, B, and C and short-term and long-term.

Same difference. Name a broker which has done that? I haven't seen any.

Reply to
D. Stussy

match the requirements for the new Form 8949. That is, the trades must be sorted into short-term and long-term as well as Type A, B, and C.

Okay, I read the instructions for Form 8949. It will take me days to enter the information from my statements onto it (probably 200 lines on my 100 on my son's), and certainly I will have errors. My statements are broken down by long and short term, and everything I have is Type A. (Fidelity) So my statements will be acceptable?

Reply to
Toller

match the requirements for the new Form 8949. That is, the trades must be sorted into short-term and long-term as well as Type A, B, and C.

The statements will be acceptable if they contain "all the same information as Form 8949 and in a similar format" (quoted from the Instructions for Schedule D, page D-8, middle column). If they don't meet that requirement, you can download the transactions from Fidelity into a spreadsheet, manipulate it into the required format, and print it to use as the attached statements.

Bob Sandler

Reply to
Bob Sandler

match the requirements for the new Form 8949. That is, the trades must be sorted into short-term and long-term as well as Type A, B, and C.

the information from my statements onto it (probably 200 lines on my 100 on my son's), and certainly I will have errors.

Type A. (Fidelity)

I would still be very careful, with that many trades, that you are not deducting for any wash losses. Some of the statements from the brokerage houses make the wash losses easier to spot than others....but any way you look at it, a wash loss creates a basis adjustment and is not a current loss.

Reply to
mammondee

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