IB 1099-B appears to have many errors

sprstpd:

The point is though that now IB doesn't provide anywhere a gain/loss readout for those on mark-to-market even though they have many traders who are on it. So, one must take their gain/loss for your account from one of their forms and as you stated.....then add back in the dissallowed losses. However, as a couple of threads on this board have indicated...there seems to be errors on the 1099. As i believe i described above on two different IB documents i have a difference of $50,000.00 in my total wash sales....so how is one to come up with the correct gain/loss? If i go ahead and sit down sum up hundreds and hundreds of transactions I may filing different numbers than IB is to the irs.
 
Quote from bigpig41:

was happy after the webinar that I was able to use their formula to be applied to the 8949 worksheet to calculate the gain/loss for the year and actually have it come out within a few cents of what the gain/loss shows at the bottom of the "trades" section of my 2011 activity statement....HOWEVER, both of those figures(one from the 8949 worksheet and the other from the activity statement) have the wash sales adjustments included in the gain/loss.....since i'm on mark-to-market i need to subtract out the wash sales but am running into the problem where the total wash sales on the 1099 page 2 are 50K different from the sum of all the wash sales in the trades sections of the activity statement. Which is accurate?????????? not getting anywhere calling funds/banking or submitting tickets bout it to IB .
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This discrepancy is likely the result of the new cost basis reporting rules. Under these rules, the wash sales reported on the 1099 are only to be those involving 'covered' securities. In contrast, the activity statement includes wash sales independent without regard to the securities classification as 'covered' or 'uncovered'. If you believe that there is something else going on, please PM me with details.
 
We are seeing major problems with botched 1099-Bs struggling with new IRS cost-basis reporting rules. Check our blog soon for major advice on the subject. Plan to file extensions for 4/15. Our firm won't sign off on most Form 8949s until these glaring 1099-B errors are corrected. This is a very disruptive problem this tax season. CEO GreenTraderTax
 
Robert:

As a professional tax preparer...THANK YOU FOR CONTRIBUTING on this forum.

Can you verify that the form 8949 is a universal requirement for all brokers to prepare and that it should have ALL trades both covered and uncovered on it as well as ALL wash sales?

Is it true that the 1099 generated by firms won't have all the wash sales on them but only those pertaining to "covered securities" . Shouldn't they though have ALL the completed trades on them?....and not just the "covered securities" trades ?
 
Quote from bigpig41:

Robert:

As a professional tax preparer...THANK YOU FOR CONTRIBUTING on this forum.

Can you verify that the form 8949 is a universal requirement for all brokers to prepare? Is it true that the 1099 generated by firms won't have all the wash sales on them but only those pertaining to "covered securities" . Shouldn't they though have ALL the completed trades on them?....and not just the "covered securities" trades ?
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Thanks. Brokers are only required to issue 1099-Bs in compliance with phased-in cost basis reporting rules. They are not asked to generate Form 8949, although some are trying (poorly). It's impossible for one broker to spot wash sales across multiple brokerage accounts and that is what taxpayers need to do.

Some brokers do the minimum reporting required, and others report more items, like including 2010 cost-basis on stock, when only 2011 cost basis is required. We are noticing significant problems with wash sale reporting. We will look into your above suggestions on wash sale and other issues and reply on this thread very soon.

One major broker is adjusting wash sales to proceeds rather than cost basis. Another is not closing out very old wash sales. Most of our clients use TradeLog and the program is displaying huge differences with 1099Bs in all directions and ways. This requires investigation of differences and 1099-B corrections and that is extremely difficult. I should have a blog on this tomorrow or by Monday. Thanks.
 
thank you and I'll watch for your blog on your site.

I'm just trying to come up with an accurate gain/loss with no wash sales involved as I'm on mark to market. Not sure which of three different wash sale totals to remove to come up with my number
 
Slightly off topic - but for those that listened to the excellent 8949 IB webinar - here is a followup on establishing basis versus sale for future IB trades:

Tax Optimizer - Beta
IB's new Tax Optimizer allows customers to manually match specific lots on a daily basis, but it doesn't stop there. It also lets customers run real-time "what if" scenarios to help them pick the most beneficial methodology, see the realized P&L impact of their chosen method by asset class, symbol and lot, and choose from six different lot-matching algos based on objective. Available matching algos include:

LIFO
FIFO
Maximize Long-Term Loss
Maximize Short-Term Loss
Maximize Short-Term Gain
Maximize Long-Term Gain

Tax Optimizer
To access the tool, log into Account Management and click Tax Optimizer in the Reports menu. Tax Optimizer is available for stock, option, bond, warrant and single-stock futures trades. Customers can specify match intentions until 8:00 pm ET on the trade date.

It won't really matter to day traders, short-term traders, and mark-to-market traders, but might help if you also do longer-term investing.

Jack
 
The biggest issue I've found is that 2010 trades have not been taken into account in the wash loss calculations. I guess theoretically IB might have to go back years, but at least bootstrapping the process by including 2010 would have been a nice way to start the process.

Other than that, my wash loss calcs look good (so far).
 
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