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Posted by JM on January 23, 2008, 10:01 am
Please log in for more thread options > Hi, JM.
>
> Amen!
>
> We discussed this (amended dividend/return-of-capital/cost basis informati=
on
> based on post-year-end accounting) here just a couple of weeks ago, as I
> recall.
>
> RC
> --
> R. C. White, CPA
> San Marcos, TX
> (Retired. =A0No longer licensed to practice public accounting.)
> r...@grandecom.net
> Microsoft Windows MVP
> (Currently running Quicken 2008 Deluxe in Vista Ultimate x64)
>
>
>
>
>
> > <snip>
> >> I do check the downloaded schedule information against
> >> my Quicken records (and the 1099s), just to be doubly sure, but I have
> >> never trusted Quicken enough to allow it to be the direct source of
> >> ANY of my tax information. It's kind of a sad situation that these
> >> products are not in lock step with each other, but I don't feel they
> >> are. As an example, something I sold in December 2007 had a different
> >> cost basis in Quicken then in the brokerage records. I investigated
> >> all my records and traced it back to dividends that were reclassified
> >> in Dec 2006 to be "non dividend distribution". I have to assume this
> >> was ROP because it was the source of the reduced cost basis. But
> >> there is no transaction in Quicken that reflects this
> >> reclassification. Since I religiously download from my brokerage, I
> >> very much doubt I missed one single transaction. I believe the
> >> reclassification and cost basis adjustment was done only at the
> >> brokerage level. Thus their records were correct and my quicken
> >> records were not and I would have filed an incorrect Schedule D if I
> >> had relied on Quicken.
>
> > The points you raise are very legitinate - but [IMO] an unfair
> > criticism of Quicken as to tax reporting capabilities.
>
> > Reclassification of dividend income is a common experience to me and,
> > in most cases, is not revealed until the Form 1099 or the Amended Form
> > 1099 is issued. In dealing with several brokerage firms over the
> > years, I have never seen a firm record register transactions that
> > reflect the reclassification - they are simply reflected in the 1099.
> > Thus, there is no transaction to download and, in turn, no mechanism
> > for Quicken to reflect these events.
>
> > Proper tax reporting in QW is a high priority for me and I anxiously
> > await the 1099's and particularly the ammended 1099's so that I can go
> > back and manually make the reclassifications in my QW registers. This
> > is extra work [sometimes a lot!!] but important to me. Can say that my
> > QW tax reports match the 1099's to the penny when I'm done - this goes
> > back quite a number of years.
>
> > Am in the process of filing and ammended return for 2006 and one of
> > the items is a dividend reclassification that a brokerage firm did not
> > report; i.e., I paid taxes on dividends that were in fact ROC. My QW
> > records helped tip me to this error.
>
> > As to the cost basis issue you raise, I don't completely trust the
> > brokerage firms numbers. Have found on several occassions that they do
> > not reflect ROC events; they simply report original acquisition costs.
> > In these cases I use my [QW's] numbers to prepare Sched D - after
> > careful scrutiny.
>
> > Bottom line, maintaining good records for tax purposes is not an easy
> > task - certainly not "automatic' based on downloaded info. Look at
> > your QW records and your FI's records with equal skepticism!!- Hide quot=
ed text -
>
> - Show quoted text -
Hi RC
Yes, I followed that thread with interest - found your comments on the
origin of ROC particularly informative. Had never seen a good
explanation.
Question in this regard - when a FI reports a "Non-taxable
distribution" for a position, are there any other possiblities other
than ROC for this?
TIA - JM
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