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Subject Author Date
sale of investments and tax question Gwen Morse 07-13-2008
Posted by Gwen Morse on July 13, 2008, 8:30 am
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 I have two accounts that I invested in over several years and then let
sit. They're Joint Tenency accounts held with my ex, whose decided he
wants his cut. I'll be closing the accounts and selling the contents
in the next month. There are no problems with that.

One is a DRIP/DSP stock account. The other is an index mutual fund.
Neither has had an actual cash infusion for some time (at least 3
years). Both have had their dividends/returns automatically reinvested
each quarter/year.

I want to try to plan ahead for tax time and filling out my taxes. I
don't have paper statements for either account, but each transaction
has been entered into Quicken (presently 2007 Premier). When it comes
time to report these sales on my taxes, I know I need to provide the
purchase price of each share, as well as the selling price, based on
the age (are they long term holdings or short term holdings, etc).

My question is this: Do I provide the cost basis as one number (ie:
all the purchase prices on the LT shares added together) and the
selling price as another (ie: all the selling prices added together),
or do I provide an itemized report of all transactions.

Would this be the year to buy Turbo Tax, so that it can just import
the info from Quicken?

Gwen
--
Gwen Morse mailto:goldmooneachna@yahoo.com
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
"Love is a snowmobile racing across the tundra and then
suddenly it flips over, pinning you underneath. At night,
the ice weasels come." -- Matt Groening

Posted by Stevey on July 13, 2008, 4:01 pm
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 Each purchase will count as a separate sale transaction and the cost
basis and date will be entered separately. On the mutual fund,
however, you have the choice of using average cost, which the mutual
fund company should be able to furnish you if they haven't already.

My advice would be to buy a tax prep program so that you wouldn't have
to enter all of the transactions. TurboTax or TaxCut either one can
do that.



>I have two accounts that I invested in over several years and then let
>sit. They're Joint Tenency accounts held with my ex, whose decided he
>wants his cut. I'll be closing the accounts and selling the contents
>in the next month. There are no problems with that.
>
>One is a DRIP/DSP stock account. The other is an index mutual fund.
>Neither has had an actual cash infusion for some time (at least 3
>years). Both have had their dividends/returns automatically reinvested
>each quarter/year.
>
>I want to try to plan ahead for tax time and filling out my taxes. I
>don't have paper statements for either account, but each transaction
>has been entered into Quicken (presently 2007 Premier). When it comes
>time to report these sales on my taxes, I know I need to provide the
>purchase price of each share, as well as the selling price, based on
>the age (are they long term holdings or short term holdings, etc).
>
>My question is this: Do I provide the cost basis as one number (ie:
>all the purchase prices on the LT shares added together) and the
>selling price as another (ie: all the selling prices added together),
>or do I provide an itemized report of all transactions.
>
>Would this be the year to buy Turbo Tax, so that it can just import
>the info from Quicken?
>
>Gwen

Posted by TomYoung on July 14, 2008, 12:50 pm
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> I have two accounts that I invested in over several years and then let
> sit. They're Joint Tenency accounts held with my ex, whose decided he
> wants his cut. I'll be closing the accounts and selling the contents
> in the next month. There are no problems with that.
>
> One is a DRIP/DSP stock account. The other is an index mutual fund.
> Neither has had an actual cash infusion for some time (at least 3
> years). Both have had their dividends/returns automatically reinvested
> each quarter/year.
>
> I want to try to plan ahead for tax time and filling out my taxes. I
> don't have paper statements for either account, but each transaction
> has been entered into Quicken (presently 2007 Premier). When it comes
> time to report these sales on my taxes, I know I need to provide the
> purchase price of each share, as well as the selling price, based on
> the age (are they long term holdings or short term holdings, etc).
>
> My question is this: Do I provide the cost basis as one number (ie:
> all the purchase prices on the LT shares added together) and the
> selling price as another (ie: all the selling prices added together),
> or do I provide an itemized report of all transactions.
>
> Would this be the year to buy Turbo Tax, so that it can just import
> the info from Quicken?

There's no need to buy Turbo Tax just for this. What I'd do is print
out a capital gains report for each security, label each report
"Schedule 1", "Schedule 2", "Schedule 3" etc. and then post summary
LT and ST numbers from each report into the tax return in the
appropriate places with a note to "See Schedule X". Include the
schedules with the tax return. This way of doing it is certainly
acceptable.

I wonder if selling out both accounts is really necessary? Could each
account be split in two and re-titled as sole property of Spouse 1 and
Spouse 2. It's a legal question I can't answer but it would avoid,
I'd think, having to pay the taxman.

Tom Young


Posted by scott s. on July 14, 2008, 3:04 pm
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7f06c8ec7d5a@w7g2000hsa.googlegroups.com:

> There's no need to buy Turbo Tax just for this. What I'd do is print
> out a capital gains report for each security, label each report
> "Schedule 1", "Schedule 2", "Schedule 3" etc. and then post summary
> LT and ST numbers from each report into the tax return in the
> appropriate places with a note to "See Schedule X". Include the
> schedules with the tax return. This way of doing it is certainly
> acceptable.

I believe IRS still allows you to show single line entries, with an
acquisition date of "various", but I think also IRS has been
encouraging taxpayers to list out each lot separately. I use TTax,
which does list each lot, using additional D-1 forms as necessary.

scott s.
.


Posted by Gwen Morse on July 14, 2008, 3:13 pm
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wrote:

>7f06c8ec7d5a@w7g2000hsa.googlegroups.com:
>
>> There's no need to buy Turbo Tax just for this. What I'd do is print
>> out a capital gains report for each security, label each report
>> "Schedule 1", "Schedule 2", "Schedule 3" etc. and then post summary
>> LT and ST numbers from each report into the tax return in the
>> appropriate places with a note to "See Schedule X". Include the
>> schedules with the tax return. This way of doing it is certainly
>> acceptable.

For the person who asked, no, it's not possible to do anything but
sell the shares.

>I believe IRS still allows you to show single line entries, with an
>acquisition date of "various", but I think also IRS has been
>encouraging taxpayers to list out each lot separately. I use TTax,
>which does list each lot, using additional D-1 forms as necessary.

So, what I remembered reading (adding up all the cost basis details
and selling prices for LT and ST gains) is correct, but, the IRS
prefers single lines for each transaction when they could get them.

Gwen
--
Gwen Morse mailto:goldmooneachna@yahoo.com
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
"Love is a snowmobile racing across the tundra and then
suddenly it flips over, pinning you underneath. At night,
the ice weasels come." -- Matt Groening

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