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Subject Author Date
Differing 1099s Taxlover 03-06-2008
Posted by Taxlover on March 6, 2008, 1:41 pm
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 My 1099 from Fidelity broke down capital gains by long and short term, but
didn't sum the costs or proceeds (giving only the combined proceeds). I
went to the website to see if they had a better report there. Good news;
they did. Bad news; it didn't agree with the paper 1099.
I called customer service. They had a third value, and advised me to speak
to my investment manager.

He took a few days, but assured me the paper 1099 was correct and was the
information reported to the IRS. Should I be comfortable with this?

Interestingly, the online short term proceeds and the online long term
proceeds summed to the paper proceeds; so I used them with the paper gains
to determine the costs; even though the online gains were different. I hope
that makes sense.

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Posted by Phil Marti on March 6, 2008, 2:55 pm
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 "Taxlover" wrote:

> My 1099 from Fidelity broke down capital gains by long and short term, but
> didn't sum the costs or proceeds (giving only the combined proceeds).

What kind of 1099 are we talking about? I'm going to guess it's the 1099-B
portion of, perhaps, a combined statement, and these breakouts you're
talking about are somewhere in the information provided. If I'm wrong,
ignore this message and please clarify exactly what you're talking about.

> I went to the website to see if they had a better report there. Good
> news; they did. Bad news; it didn't agree with the paper 1099.
> I called customer service. They had a third value, and advised me to
> speak to my investment manager.
>
> He took a few days, but assured me the paper 1099 was correct and was the
> information reported to the IRS. Should I be comfortable with this?

No. The only thing regarding gain or loss reported to IRS is proceeds, and
the only thing regarding holding period is sale date. He's blowing smoke.

I don't suppose you have your purchase confirmations for the securities you
sold? That's what you should use in preparing Schedule D, and that's what
IRS is going to want to see in an audit.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
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Posted by DF2 on March 6, 2008, 7:10 pm
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In misc.taxes.moderated, Phil Marti wrote:

>
>> I went to the website to see if they had a better report there. Good
>> news; they did. Bad news; it didn't agree with the paper 1099.
>> I called customer service. They had a third value, and advised me to
>> speak to my investment manager.
>>
>> He took a few days, but assured me the paper 1099 was correct and was the
>> information reported to the IRS. Should I be comfortable with this?
>
>No. The only thing regarding gain or loss reported to IRS is proceeds, and
>the only thing regarding holding period is sale date. He's blowing smoke.
>
>I don't suppose you have your purchase confirmations for the securities you
>sold? That's what you should use in preparing Schedule D, and that's what
>IRS is going to want to see in an audit.

I suspect he is talking about mutual funds. If so, the average basis
data provided by Fidelity should be sufficient.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Taxlover on March 6, 2008, 10:00 pm
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> I don't suppose you have your purchase confirmations for the securities
> you
> sold? That's what you should use in preparing Schedule D, and that's what
> IRS is going to want to see in an audit.
>
Well, actually I have a dozen accounts, each of which averages 100 stock
sales each year; so a total of over a thousand sales.
What I have done in the past is to list each account's long and short term
transactions on the schedule D as a single item and attach a photocopy of
each statement to it. I've done that for the past 6 years, and my
accountant used to do it that way for many years before that.

I don't get purchase confirmations, as they are all managed accounts, but I
don't know how I could keep track of them anyhow. Isn't that what Fidelity
is supposed to be doing on the 1099? On top of my accounts my kids probably
have an equal number; it would literally take several hours a week to track
everything.
I don't wan't to sound foolish (or be foolish, for that matter) but does the
IRS really expect you to keep track of each transaction independent of the
brokerage report?

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Phil Marti on March 7, 2008, 12:27 am
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"Taxlover" wrote:

> I don't get purchase confirmations, as they are all managed accounts, but
> I don't know how I could keep track of them anyhow. Isn't that what
> Fidelity is supposed to be doing on the 1099?

Not from a tax law perspective. All the law requires is that they report
the nature of the security, the sale date, and the proceeds. It's the
taxpayer's responsibility to provide the rest.

I'd suggest you check your agreements regarding the managed accounts to see
what additional commitments Fidelity has made regarding the issue. From
what I've seen in the papers there's growing interest in assessing the
accuracy of Schedule D reporting, and if IRS decides they want to check
yours it won't be Fidelity they get in touch with.
--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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