Botched 1099-B cost-basis reporting: The List

[Robert A. Green]

Big Concerns with Botched 1099-Bs and Discrepancies on Form 8949
http://www.greencompany.com/blog/index.php?postid=139

As a leading CPA firm for preparing income tax returns for active online traders, we are spotting significant discrepancies between 2011 Form 1099-Bs provided by securities brokers – which include cost-basis information for the first time – and trade accounting software results. We have noticed scary differences on almost every file we have reviewed. It’s hard to pin point the main area of concern — so far, our CPAs are reporting big differences all across the map and it varies greatly by broker, too.

We’re putting tax filings on hold and filing extensions instead to have time to investigate these discrepancies. We expect brokers to issue wide-scale corrected 1099-Bs, and we wouldn’t be surprised to see corrections later this year. Hopefully these problems will be resolved in time to file tax returns by the extended due dates (Oct. 15 for individuals and partnerships; Sept. 15 for S-Corps).

ON THIS THREAD, please report the Form 8949 problems that you are experiencing in trying to reconcile with your broker's 1099-Bs.

We want this thread to be a Master List or FAQ for problems and solutions on this topic. We hope to pressure brokers to fess up to this mess and to clean it up with corrected 1099-Bs. Otherwise, tens of thousands of traders may get tax notices and related problems. I explain more in my above blog. Thanks, Robert A. Green, CPA

 

[gkishot]

Quote from Robert A. Green:

Big Concerns with Botched 1099-Bs and Discrepancies on Form 8949
http://www.greencompany.com/blog/index.php?postid=139

As a leading CPA firm for preparing income tax returns for active online traders, we are spotting significant discrepancies between 2011 Form 1099-Bs provided by securities brokers – which include cost-basis information for the first time – and trade accounting software results. We have noticed scary differences on almost every file we have reviewed. It’s hard to pin point the main area of concern — so far, our CPAs are reporting big differences all across the map and it varies greatly by broker, too.

We’re putting tax filings on hold and filing extensions instead to have time to investigate these discrepancies. We expect brokers to issue wide-scale corrected 1099-Bs, and we wouldn’t be surprised to see corrections later this year. Hopefully these problems will be resolved in time to file tax returns by the extended due dates (Oct. 15 for individuals and partnerships; Sept. 15 for S-Corps).

ON THIS THREAD, please report the Form 8949 problems that you are experiencing in trying to reconcile with your broker's 1099-Bs.

We want this thread to be a Master List or FAQ for problems and solutions on this topic. We hope to pressure brokers to fess up to this mess and to clean it up with corrected 1099-Bs. Otherwise, tens of thousands of traders may get tax notices and related problems. I explain more in my above blog. Thanks, Robert A. Green, CPA

IB has reported cost-basis information to IRS only for stocks,not options,correct?

 

[trefoil]

Ditto TD. That seems to be the source for this.

 

[jokepie]

Yes .. IB did something... i received IRS bill today... for 27k...
Stupid morons... cant figure out anything right.

 

[MR.NBBO]

Interactive Brokers:
Not extinguishing a wash sale after 30+days have passed, in many if not all cases.

Best/cleanest examples are 1 day in-out trades that may have produced an initial loss, but at end of day, there's a gain, and then NO trades for 30+ days. So in any case, there should be no dissallowed loss on 2 different fronts:Net gain, and 30+day passes without trading again.

 

[heywally]

Quote from Robert A. Green:

Big Concerns with Botched 1099-Bs and Discrepancies on Form 8949
http://www.greencompany.com/blog/index.php?postid=139

...

Thanks for your posts Robert.

So, are these 'error' tax forms something that IB has already sent to the IRS?

If so, does anyone know anything about follow-ups from brokers to the IRS, to fix the problem?

 

[jokepie]

Mr. Robert,

Since i received the messy notice already .. what do i do next.

Thanks

 

[fusionz]

Quote from jokepie:

Yes .. IB did something... i received IRS bill today... for 27k...
Stupid morons... cant figure out anything right.

What year was this(obviously can't be this year yet, so new cost-basis reporting doesn't apply)?

 

[jokepie]

Quote from fusionz:

What year was this(obviously can't be this year yet, so new cost-basis reporting doesn't apply)?

This for 2010 tax yr. I saw the list of transactions on the notice - They only have sales date and no purchase dates... Doesn't make any sense - it seems like they reported half of the transactions and these are mostly intra-day trades.

 

[Robert A. Green]

Quote from gkishot:

IB has reported cost-basis information to IRS only for stocks,not options,correct?

Brokers are supposed to report 2011 stock purchases, and not options which are reportable in 2013. My partner Darren Neuschwander CPA will post on how different brokers are reporting, and problems that we are noticing.