Huge Sch B...do I need to enter all 1400 transactions?

[Janitor Bob]

client just dropped off her Sch B...all 70 pages...approx. 1,400 individual transactions. Do I need to enter every single transaction? Can I lump them together by term as Long term gain/loss and short term gain/loss? Page one is just such a summary....could I do that and just enter "various" or "see statement" as the transaction description?

1,400 transactions would take me way more time than what I could possibly recoup from this elderly woman.

[David1980]

The client dropped off a Sch B or a 1099-B?

These interest/dividends?

[kcjenkins]

Yep, use the summary, and move on. The statement should be scanned, though, so that you have backup if asked..

[Janitor Bob]

sorry....client dropped off a 70-page 1099-B..proceeds from sales of stocks

Thanks KC...that is exactly what I have done.....just wanted to bounce it off the wise people here. I've never seen this many transaction before...end result is $3,437 Short-Term gain and $1,785 Long-Term gain.

[Janitor Bob]

Oh...and paid $1,700 in transaction fees.

[ILLMAS]

For billing purposes is best to enter each one, one by one at $1 to $5 each = $1,400 to $7,000 in your pocket, what do you prefer?

[Janitor Bob]

This lady does not have that kind of money.....and while a nice fee it would make, I do not have that much time.

She also smart enough to know that she could go elsewhere and find someone to do it the cheaper "summary" method

I also do not want her to have a heart attack in my office.

...also she always brings me cookies

[michaelmars]

new this year - if the cost is reported to irs then you can put the totals on sch d. then you only have to list the other transactions.

[Janitor Bob]

surprisingly...all have costs...first time I've seen that as well

[David1980]

You'll want to use exception 1 or exception 3 or possibly both.

If the basis was provided to the IRS use exception 3. Enter the short term and long term totals directly to Sch D line 1a/8a.

If the basis was not provided to the IRS, but you have a statement containing all the same information in a similar format use exception 1. The IRS even has an adjustment code for you to use to indicate you are doing this - code M. The statement is then either mailed with 8453 or attach as a PDF to the return.

If you have some that do have basis reported to the IRS and some that don't, you can use both exceptions. Enter on 1a/8a the ones that have basis reported to the IRS. Nothing else needs to go to the IRS for those ones. Then use exception 1 and mail or attach the statement for the rest.

[Janitor Bob]

What if the transactions include nondeductible wash sales....Am I still allowed to use a summary method?

[jklcpa]

What if the transactions include nondeductible wash sales....Am I still allowed to use a summary method?

Then you can't use exception 3 by entering directly on sch D. You can use exception 1 that allows you to enter the summary totals on 8949 and attach a pdf of the broker statement or mail it in with the 8453.

[Janitor Bob]

That's gonna be a huge pdf file.

[jklcpa]

That's gonna be a huge pdf file.

Yes, I know. That was taken directly from the instructions for the 8949 for Exception 1, and those instructions also specifically say "do not enter 'available upon request' " like some preparers used to do.

[Jack from Ohio]

• That's gonna be a huge pdf file.

  When you scan, use the highest compression setting and only 200X200 resolution.

[Janitor Bob]

Thanks....I read that as well. I have never sent an attachment along with the e-file...Is it difficult?...any more so with larger files? I may just mail it with the 8453.

[HV Ken]

I ask my clients to get an CSV version from their broker for me, and then import it from the CSV into ATX. Works great! Takes only a couple of minutes and produces a very impressive tax return!!

[SCL]

Oh...and paid $1,700 in transaction fees.

"the rest of the story" (paul harvey).

I guess she made $5200 on paper (after fees).

the average market was up 30% last year.

what is her stock portfolio balance...is $5200 a 30% gain.

maybe her broker earned his churning fees.

no doubt, the broker should not be trading/churning an elderly woman's stock account.

[PaulH]

If there are only a few wash sales, I have entered them on the 8949, then calculated the eligible aggregated long and short term totals by subtraction, and entered those 4 numbers directly on Sch D.

[Janitor Bob]

I thought about that, but there are at least 20 was sale transactions....maybe more...I quit looking after I got to 20.

[Lion EA]

If she was willing to pay her broker $1,700 then you need to charge her at least that.

Read the new rules thoroughly and do whatever is the least amount of work for you to conform to the rules.

My favorite method is import. Takes seconds. Produces a fat client copy. Efiles fast. And, I charge by the pound!!

[Janitor Bob]

She was not "willing" to pay anything...this little old lady did not even know this activity in her investment account was happening....These gains increased her wealth on paper, but they also took her $227 refund and turned it into a $984 balance due. Sure, part of her is happy that her investments are worth more, but she did not anticipate nor does she have the funds to cover her $984 tax bill....regardless of how much of a fee I deserve...or think I deserve, I cannot and will not do that to her.

[JohnH]

"the rest of the story" (paul harvey).

I guess she made $5200 on paper (after fees).

the average market was up 30% last year.

what is her stock portfolio balance...is $5200 a 30% gain.

maybe her broker earned his churning fees.

no doubt, the broker should not be trading/churning an elderly woman's stock account.

Or she could have been in the Vanguard Total Stock Market and she would have been guaranteed to do as well as the average of the US stock market. Fees would have been pennies on the dollar ($1.70 per thousand, to be exact), and she would have been exposed to zero decision-making risk, only market risk.

[Janitor Bob]

Her broker is Curian...does that mean anything to anybody

[Margaret CPA in OH]

Oooohhh, does it ever! I have had 2 clients with them and warned them over a couple of years of what I saw happening. Losses mounted on losses with churning and little to no understanding by the clients. One finally transferred to another broker after interviewing a couple, Edward Jones, I think. The other one stopped coming to me without explanation.