Tax help for stock sales

Report the basis to the IRS.

Obvy wrote:

Report the basis to the IRS.

It's that easy? I have all the tax documents from my online broker, so that should be simple.

Good luck getting an IRS person on the phone. I am not sure but I would think you would have to file amended tax return but since only one stock you may not have to.

Why would he have to get the IRS on the phone? Just file an amended return showing the cost basis. This isn't rocket science.

Why did you sell for a loss in 2013? Idiot.

The IRS does this all the time. They assume it is all a gain if you do not report it. You had to report the losses on Sched D. Just file an amended return and show your losses. The good news is you can take the losses as a deduction against gains or up to 3,000 a year if they are paid off.

You TOTALLY redeemed yourself with that last comment.

meant UNTIL they are paid off.

You just need to communicate the cost basis and date of purchase to the IRS.

Include a copy of the notice in your response and check the box "I disagree" on your response form.

If the loss is not significant...i.e. a couple hundred dollars...then just giving the IRS the purchase info in a letter will work just fine.

If the loss is significant...you may want to consider preparing an amended return as it will likely result in a refund...or at least an increase in a capital loss carryover.

If you do the amended return, do not send the amended return to the address where amended returns are sent. In this case, include your amended return with your response to the IRS and explain in your letter that you are attaching an amended return which details all the necessary information and corrections. Also, explain that you have not sent in the amended return in order to avoid confusion...and would they kindly process it.

This is common...and easy to fix.

Next time...make sure to report the transaction on schedule 8949...regardless of gain or loss.

I've done taxes for a living and it really is that easy. You could file an amended return. But I believe on the IRS notice you got there is a section giving you several options to checkmark. One is "if you disagree with this...". Checkmark that, and send in documentation that backs up your loss. That should be it. You shouldn't have to talk to the IRS. For some reason 1099 statements often do not provide basis information. It seems absurd given we have been living in a computer age for several decades now, but that is the way it is.

vivalarepublica wrote:

Obvy wrote:

Report the basis to the IRS.

It's that easy? I have all the tax documents from my online broker, so that should be simple.

For people who are claiming to be knowledgeable, there are some things they are not telling you.

File an amended return.

Get form 1040 D, which is capital gains and losses, and you still use that form for stocks held less than 1 year. Schedule D will show you what information you need.

You should have a final statement for the year which is a list of all stocks bought and sold. All of the basis information should be in this statement, and these statements should be available on-line. You might need to go to a previous year's statement for some of the basis. If you don't have this statement, contact your brokerage and ask for it.

coach d wrote:

For people who are claiming to be knowledgeable, there are some things they are not telling you.

File an amended return.

Get form 1040 D, which is capital gains and losses, and you still use that form for stocks held less than 1 year. Schedule D will show you what information you need.

You should have a final statement for the year which is a list of all stocks bought and sold. All of the basis information should be in this statement, and these statements should be available on-line. You might need to go to a previous year's statement for some of the basis. If you don't have this statement, contact your brokerage and ask for it.

He does not need the amended return unless the loss is significant.

If the loss is significant, he wants to do the amended return to get taxes refunded. There is no other reason...except that it's a good way to communicate the info.

As I said above...the amended return gets sent to the address they want the response sent...along with the response form...with the "I disagree" box checked.

He needs form 8949 and schedule D. The stock purchase info goes on form 8949 and flows to schedule D.

He does not need to send any proof...statements etc...but I suppose he can if he wants.

I've handled this so many times I thought I'd try to help.

Thanks guys. The losses weren't significant, just a few hundred combined.

I did the same mistake for my 2014 taxes, I might have to amend that return as well.

I tend to disagree that he has to file an amended return. But it depends on the situation. If the IRS made changes to his return then they should have sent him a notice where he it advises him how to respond if he disagrees with those changes. Basically, I advocate that the OP read that notice and do as it says. I don't think amending the return is necessary. But if there is no avenue to disagree with the notice, then he should amend.

coach d wrote:

For people who are claiming to be knowledgeable, there are some things they are not telling you.

File an amended return.

Get form 1040 D, which is capital gains and losses, and you still use that form for stocks held less than 1 year. Schedule D will show you what information you need.

You should have a final statement for the year which is a list of all stocks bought and sold. All of the basis information should be in this statement, and these statements should be available on-line. You might need to go to a previous year's statement for some of the basis. If you don't have this statement, contact your brokerage and ask for it.