Ways we can be our own worst enemy

[rfassett]

1.  I just spent several minutes reviewing the criteria for the Schedule D entry for covered securities in total for LT and ST because when I opened the envelope for this return I am working on, I pulled out three brokerage statements and did not want to hand enter all of those 8949 entries that were there.  Well, alas, the first statement had uncovered sales.  So to the 8949 I went.  Well, there were a total of three entries on the 8949 - one from each brokerage statement.  That was it.  If I would have looked at the brokerage statements first, I would have went right to the 8949 and been done with that in less time than I took looking at the Schedule D short cut.  Sheesh!!!

[MsTabbyKats]

Ever since the IRS made the brokers give cost basis...and summarize everything in a few short lines...life is so nice.

[Randall]

Yes, much better.  Especially after a few years.  Only those older accounts that have been transferred before the new rules where the current broker doesn't have basis info are a pain.

[jklcpa]

Yes, much better.  Especially after a few years.  Only those older accounts that have been transferred before the new rules where the current broker doesn't have basis info are a pain.

 

 

We'd like to hope so, but I've had brokers tell me that their organization won't enter or track any basis that wasn't derived from transactions that their firm didn't initiate or take place while the investor wasn't their client. Good example is if the client has inherited stocks, I've had brokers refuse to enter those into their system to calc the gain or loss because they don't want to take responsibility if the figures are incorrect.

[Richcpaman]

We'd like to hope so, but I've had brokers tell me that their organization won't enter or track any basis that wasn't derived from transactions that their firm didn't initiate or take place while the investor wasn't their client. Good example is if the client has inherited stocks, I've had brokers refuse to enter those into their system to calc the gain or loss because they don't want to take responsibility if the figures are incorrect.

Why should they care?

 

But such is the world we live in.

 

Rich

[Jack from Ohio]

Why should they care?

 

But such is the world we live in.

 

Rich

It is an excuse.  Translation - "We do not want to take the time to do it."

[jklcpa]

Why should they care?

 

But such is the world we live in.

 

Rich

 

Right, brokers won't care unless they are forced to include all bases in the 1099s they issue. I was responding to Randall's comment that after a number of years we won't have to worry about this as time goes on, and I was merely pointing out a very common occurrence of inherited stock that will continue to cause brokers to not be reporting all bases on the 1099s that are issued.

[Terry D EA]

I have one client who has a CRUT and has changed brokers at least twice since I have been completing his returns. Each broker has not tracked the cost basis from the earlier one. However, this guy is the ultimate dream client. He has kept every statement and transaction detail since the inception of the trust (1994 to be exact). This enabled me to create a spreadsheet with all purchases and cost basis without the broker doing so. This also enabled us to avoid a 50,000 penalty that resulted from his previous preparer using the wrong form which he/she did not know it was incorrect. At the time it should have been form 1041-A and 5227 not form 1041. Pay dirt was the original SS4 form with instructions from the IRS to use form 1041. Without the records this guy would have been nailed with the nastiest penalty ever.

[Abby Normal]

If my clients have sales without basis, I tell them that their broker is lazy and they need to find a new broker.