Differing 1099s


T

Taxlover

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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P

Phil Marti

Taxlover said:
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.
 
R

Rich Carreiro

Taxlover said:
My 1099 from Fidelity broke down capital gains by long and short term,
didn't sum the costs or proceeds (giving only the combined proceeds).
That's what's supposed to be on a 1099-B -- gross proceeds, that's
it. It's the taxpayers job to figure basis, holding period,
and gain/loss. However, if you look closely at what you got from Fidelity,
you'll see that there are actually multiple 1099-B "forms" on that
packet you got -- a separate 1099-B for every single sale transaction
you made.
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?
The 1099-B numbers are what goes to the IRS. I would expect that
whatever system at Fido that generated the paper 1099-Bs would send
the same thing to the IRS.
Interestingly, the online short term proceeds and the online long term
proceeds summed to the paper proceeds;
That's good. It indicates that proceeds (which is what is reported
to the IRS) are consistent in Fido's systems.
so I used them with the paper gains to determine the costs; even
though the online gains were different. I hope that makes sense.
So what you're saying is that the supplemental info that
Fido sent you with your 1099-INT/DIV/B/etc. has different
cost basis info than what Fido has in its online realized
gain/loss reports?
 
D

DF2

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.
 
T

Taxlover

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?
 
T

Taxlover

So what you're saying is that the supplemental info that
Fido sent you with your 1099-INT/DIV/B/etc. has different
cost basis info than what Fido has in its online realized
gain/loss reports?
Well, there were over a hundred entries on it and my eyes glazed very
quickly when I tried to compare them, but either the cost basis was
different between the two, or they split the long and short term
differently.
But it is a good question, so I tried to compare them tonight to find out
what the discrepency is.

The ones online now say "Corrected 3/4/08" and agrees with the printed
version dated 2/28/08! So whatever the problem was, it seems to be cleared
up now.
 
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P

Phil Marti

Taxlover said:
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.
 

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