Brokerages Will Have to Tell IRS What U.S. Investors Paid for Their Stock

http://finance.yahoo.com/news/Broke...38.html?x=0&sec=topStories&pos=9&asset=&ccode

I am not expecting a repeal of the 1099 law. Next year may be the last chance to dump PM's you've got a low basis on.

 

Log in or Sign up to hide this ad.

Actually, I am happy for the change as it will eliminate a lot of the paperwork for tax preparation as it will all be recorded and Turbotax should suck it in and I will only have to account for my option trades as the IRS won't start requiring that until 2013 I think. TDAmeritrade will set it for "first in first out" by default, which can be changed by a drop box.

 

Yes, this new system will make it easier to do your return. FIFO is the default method to account for stock trades. The only other available method is specific identification. To use specific identification you must comply with the Regs under Section 1012. Most brokers allow you to do this, some don't. The term used is "sale versus purchase". Neither LIFO nor average cost is available for stock trades.

 

The easiest way is to scrap this mess altogether and go to a consumption based "Fair Tax". :thumb:

 

The real point of this article is, say you have a stock that you bought a while ago that you aren't real sure what you paid for it or don't have adequate documentation so you make a guess, better guess right. Also the IRS may audit more sales of PM's because with computers doing the work for stock trades they'll have more time to come after other capital assetts. You guys do what you want but I'm slowly but surely getting my money out of the glue trap.

 

Vanguard already reports cost basis to the customer on the 1099. It's a big help.

 

I was contacted by scottrade for the first time this year about them requesting my cost basis for a couple of stocks I sold this year. Works for me as it makes electronic downloading of tax data easier. Been using turbotax for years and it's getting easier. As for the 1099 reporting for asset sales, I'd just like to see the dollar amount changed to something reasonable - either $5K or $10K. Otherwise, the paperwork will far outweigh the gains. Hell, they do it with 'garage sale' transactions now. Well, I hate to break it to you, but in reality, less than $5K in the grand scheme of things is garage sale.

peace,

rono

 

Never had any problems with Schwab or Scottrade.

I'll see how Fidelity does this year and Think or Swim.

 

Since Thinkorswim is owned by TDAmeritrade, an active account there will get you that tool. I like it, easy to trade with once you learn it. Even has Forex and Futures if you want to lose money faster