moving share certificates to a brokerage account


P

Pico Rico

Taxpayer has some old share certificates in well known publicly traded
companies. This was old school, but now needs to have the shares listed
properly in her living trust.

I am suggesting that the easy thing to do would be to have the shares added
to an existing brokerage account she has in her living trust.

Question: will the brokerage mess up the basis? Share certificates have
dates on them - will the brokerage try to figure out the basis (likely
erroneously) or will they just add the shares with no basis information?
She could figure out the basis but that would take some doing and she
doesn't have time right now. But she wants to get the shares into her
living trust properly. Will the brokerage add today's date to their files,
or the dates on the share certificates, or no data info?
 
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S

Stuart A. Bronstein

Pico Rico said:
Taxpayer has some old share certificates in well known publicly
traded companies. This was old school, but now needs to have
the shares listed properly in her living trust.

I am suggesting that the easy thing to do would be to have the
shares added to an existing brokerage account she has in her
living trust.
Why not just sign the shares over to the trust on the backs?
Question: will the brokerage mess up the basis?
It won't mess up the basis. But it might mess up proving basis.
Share certificates have dates on them - will the brokerage try to
figure out the basis (likely erroneously) or will they just add
the shares with no basis information?
I'd imagine different brokers do things different ways. Ask them.
She could figure out the basis but that would take some doing and
she doesn't have time right now. But she wants to get the shares
into her living trust properly. Will the brokerage add today's
date to their files, or the dates on the share certificates, or
no data info?
If she can figure out the basis and document it, it doesn't matter
what the brokerage thinks.
 
P

Pico Rico

Stuart A. Bronstein said:
Why not just sign the shares over to the trust on the backs?
Darn good one!
It won't mess up the basis. But it might mess up proving basis.


I'd imagine different brokers do things different ways. Ask them.


If she can figure out the basis and document it, it doesn't matter
what the brokerage thinks.
It would be nice not to have the brokerage assign an incorrect basis. A
correct basis or no basis would be easier when the time comes.
 
A

Alan

It would be nice not to have the brokerage assign an incorrect basis. A
correct basis or no basis would be easier when the time comes.
Most financial institutes allow you to enter the cost basis. This is
typically required when the shares have not been purchased in that
account. As Stuart said, the only evidence that matters is that in the
hands of the taxpayer. That is why, the 8949 form has an adjustment column.
 
P

Pico Rico

Alan said:
Most financial institutes allow you to enter the cost basis. This is
typically required when the shares have not been purchased in that
account. As Stuart said, the only evidence that matters is that in the
hands of the taxpayer. That is why, the 8949 form has an adjustment
column.
at some point someone is going to start looking at those adjustment columns,
and that will prove to be a real annoyance. As I said, a correct basis or
no basis would be easier when the time comes.
 
D

Don Priebe

at some point someone is going to start looking at those adjustment
columns, and that will prove to be a real annoyance.
As I said, a correct basis or no basis would be easier when the time
comes.

Unless the rules change, the brokerage house will not report ANY basis
to the IRS when you sell those stocks, because they only report basis
for COVERED transactions. IIRC, only stocks purchased on or after Jan 1
2012 can be sold in a covered transaction. So when these are sold they
should be reported to the IRS as UNCOVERED (code E) with a blank in the
basis column.

Don EA in Upstate NY
 
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B

BignTall

Taxpayer has some old share certificates in well known publicly traded
companies. This was old school, but now needs to have the shares listed
properly in her living trust.

I am suggesting that the easy thing to do would be to have the shares added
to an existing brokerage account she has in her living trust.

Question: will the brokerage mess up the basis? Share certificates have
dates on them - will the brokerage try to figure out the basis (likely
erroneously) or will they just add the shares with no basis information?
She could figure out the basis but that would take some doing and she
doesn't have time right now. But she wants to get the shares into her
living trust properly. Will the brokerage add today's date to their files,
or the dates on the share certificates, or no data info?
The broker's software may very well assign a basis and it is all but
guaranteed to be wrong. Fortunately it doesn't really matter. The IRS
created Columns F and G on the 8949 because they knew the cost basis
reported by brokers was often going to be wrong. This was a way to
allow the taxpayer to make the necessary corrections and still let the
IRS computers avoid a mismatch between what the broker reports and
the tax return. If the broker is really on the ball (not likely),
they will notice the certificates were all issued before 2012 and
will not report cost basis to the IRS when the stock is eventually
sold. I wouldn't count on that. Form 8949 Columns F and G are your
friend, don't worry about using them.
 
P

Pico Rico

BignTall said:
The broker's software may very well assign a basis and it is all but
guaranteed to be wrong. Fortunately it doesn't really matter. The IRS
created Columns F and G on the 8949 because they knew the cost basis
reported by brokers was often going to be wrong. This was a way to
allow the taxpayer to make the necessary corrections and still let the
IRS computers avoid a mismatch between what the broker reports and
the tax return. If the broker is really on the ball (not likely),
they will notice the certificates were all issued before 2012 and
will not report cost basis to the IRS when the stock is eventually
sold. I wouldn't count on that. Form 8949 Columns F and G are your
friend, don't worry about using them.
That may be true for a while, but at some point anything written in Columns
F and G will get the green eyeshade treatment. Mark my words.
 
W

W. Baker

: On 8/9/2014 11:43 AM, Pico Rico wrote:
: > Taxpayer has some old share certificates in well known publicly traded
: > companies. This was old school, but now needs to have the shares listed
: > properly in her living trust.
: >
: > I am suggesting that the easy thing to do would be to have the shares added
: > to an existing brokerage account she has in her living trust.
: >
: > Question: will the brokerage mess up the basis? Share certificates have
: > dates on them - will the brokerage try to figure out the basis (likely
: > erroneously) or will they just add the shares with no basis information?
: > She could figure out the basis but that would take some doing and she
: > doesn't have time right now. But she wants to get the shares into her
: > living trust properly. Will the brokerage add today's date to their files,
: > or the dates on the share certificates, or no data info?
: >
: The broker's software may very well assign a basis and it is all but
: guaranteed to be wrong. Fortunately it doesn't really matter. The IRS
: created Columns F and G on the 8949 because they knew the cost basis
: reported by brokers was often going to be wrong. This was a way to
: allow the taxpayer to make the necessary corrections and still let the
: IRS computers avoid a mismatch between what the broker reports and
: the tax return. If the broker is really on the ball (not likely),
: they will notice the certificates were all issued before 2012 and
: will not report cost basis to the IRS when the stock is eventually
: sold. I wouldn't count on that. Form 8949 Columns F and G are your
: friend, don't worry about using them.

I find a problem with using Turbotax when reporting gains. for some
reason it does not permit the use of the term "various" when giving a
basis. As I often have either several purchase dates(prior to 2012) or
reinvested dividends, I refer to use "various" rahter than have to list
every small transaction and I understand this is OK to do. Has anyone
using the taxpayer(as oppsed to a professiona) version of thturbotax found
a way to use "various?"

Just a bit more of a comlication to throw into this mixture . I am also
havieng the devil of a time gettign my new brokerage firm from taking my
best calculations of the basis of stocks I have held for a long time.
they keep trying to do research on old stock splits that my sone finds
easily on line, but they can't. this is a large, well known firm I will
not name, but it is driving me crazy!

Wendy
 
M

MTW

Unless the rules change, the brokerage house will not report ANY basis
to the IRS when you sell those stocks, because they only report basis
for COVERED transactions. IIRC, only stocks purchased on or after Jan 1
2012 can be sold in a covered transaction. So when these are sold they
should be reported to the IRS as UNCOVERED (code E) with a blank in the
basis column.
That's my understanding as well.

And further, even though the broker might allow you to furnish basis numbers for use in various reports, my understanding is that they will "never" report THOSE numbers to the IRS on Form 1099-B. They will only report numbers generated by actual purchases in "covered" transactions executed by them, or is some cases by prior brokers if the account was properly transferred.

At least, this is my understanding...your mileage might vary. :)

MTW
 
J

jmfbahciv

Don said:
columns, and that will prove to be a real annoyance.
comes.

Unless the rules change, the brokerage house will not report ANY basis
to the IRS when you sell those stocks, because they only report basis
for COVERED transactions. IIRC, only stocks purchased on or after Jan 1
2012 can be sold in a covered transaction. So when these are sold they
should be reported to the IRS as UNCOVERED (code E) with a blank in the
basis column.

Don EA in Upstate NY
the problem I'm seeing is that the brokerage rounds monthly so
reports to the IRS will always be off for the cost basis.
I reinvest dividends and sold the stock of a company which always
reported dividends in the middle of March; so the brokerage didn't
send me a 1099 report until the end of March. Their cost basis
for the reinvested dividends was off by a couple of dollars.
I didn't round until I had the total. They seemed to have rounded
with each quarterly purchase.

/BAH
 
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P

Pico Rico

W. Baker said:
: On 8/9/2014 11:43 AM, Pico Rico wrote:
: > Taxpayer has some old share certificates in well known publicly traded
: > companies. This was old school, but now needs to have the shares
listed
: > properly in her living trust.
: >
: > I am suggesting that the easy thing to do would be to have the shares
added
: > to an existing brokerage account she has in her living trust.
: >
: > Question: will the brokerage mess up the basis? Share certificates
have
: > dates on them - will the brokerage try to figure out the basis (likely
: > erroneously) or will they just add the shares with no basis
information?
: > She could figure out the basis but that would take some doing and she
: > doesn't have time right now. But she wants to get the shares into her
: > living trust properly. Will the brokerage add today's date to their
files,
: > or the dates on the share certificates, or no data info?
: >
: The broker's software may very well assign a basis and it is all but
: guaranteed to be wrong. Fortunately it doesn't really matter. The IRS
: created Columns F and G on the 8949 because they knew the cost basis
: reported by brokers was often going to be wrong. This was a way to
: allow the taxpayer to make the necessary corrections and still let the
: IRS computers avoid a mismatch between what the broker reports and
: the tax return. If the broker is really on the ball (not likely),
: they will notice the certificates were all issued before 2012 and
: will not report cost basis to the IRS when the stock is eventually
: sold. I wouldn't count on that. Form 8949 Columns F and G are your
: friend, don't worry about using them.


Just a bit more of a comlication to throw into this mixture . I am also
havieng the devil of a time gettign my new brokerage firm from taking my
best calculations of the basis of stocks I have held for a long time.
they keep trying to do research on old stock splits that my sone finds
easily on line, but they can't. this is a large, well known firm I will
not name, but it is driving me crazy!

Wendy
Wendy, this is exactly the point of my post and my concern as well.

Can you tell them to just "forget about it"? If they are pre 2012
purchases, it is none of their concern.
 
B

Bob Sandler

I find a problem with using Turbotax when reporting gains. for some
reason it does not permit the use of the term "various" when giving a
basis. . . .
I'm not sure what you mean by that. The basis cannot be "various." The basis has to be a number. That is an IRS requirement, not a TurboTax requirement.
. . . As I often have either several purchase dates(prior to 2012) or
reinvested dividends, I refer to use "various" rahter than have to list
every small transaction and I understand this is OK to do. Has anyone
using the taxpayer(as oppsed to a professiona) version of thturbotax found
a way to use "various?"
The consumer version of TurboTax does allow "various" for the purchase date. As soon as you type the letter V in the "Date of Acquisition" it fills in the rest of the word. It's not clear why you are having trouble.

If you want to pursue it, you would probably get the best help by posting your question in the TurboTax support forum ("TurboTax AnswerXchange") at https://ttlc.intuit.com/. In your post, explain the exact steps you are using to enter the sale, and what happens when you try to type "various" in the Date of Acquisition. Also state the exact version you are using - online or CD/download, and which edition - Basic, Deluxe, etc.

By the way, there is no professional version of TurboTax. It is for individual consumer use only. The professional software products from Intuit are not called TurboTax.

Bob Sandler
 
W

W. Baker

: : > : On 8/9/2014 11:43 AM, Pico Rico wrote:
: > : > Taxpayer has some old share certificates in well known publicly traded
: > : > companies. This was old school, but now needs to have the shares
: > listed
: > : > properly in her living trust.
: > : >
: > : > I am suggesting that the easy thing to do would be to have the shares
: > added
: > : > to an existing brokerage account she has in her living trust.
: > : >
: > : > Question: will the brokerage mess up the basis? Share certificates
: > have
: > : > dates on them - will the brokerage try to figure out the basis (likely
: > : > erroneously) or will they just add the shares with no basis
: > information?
: > : > She could figure out the basis but that would take some doing and she
: > : > doesn't have time right now. But she wants to get the shares into her
: > : > living trust properly. Will the brokerage add today's date to their
: > files,
: > : > or the dates on the share certificates, or no data info?
: > : >
: > : The broker's software may very well assign a basis and it is all but
: > : guaranteed to be wrong. Fortunately it doesn't really matter. The IRS
: > : created Columns F and G on the 8949 because they knew the cost basis
: > : reported by brokers was often going to be wrong. This was a way to
: > : allow the taxpayer to make the necessary corrections and still let the
: > : IRS computers avoid a mismatch between what the broker reports and
: > : the tax return. If the broker is really on the ball (not likely),
: > : they will notice the certificates were all issued before 2012 and
: > : will not report cost basis to the IRS when the stock is eventually
: > : sold. I wouldn't count on that. Form 8949 Columns F and G are your
: > : friend, don't worry about using them.
: >
: >
: > Just a bit more of a comlication to throw into this mixture . I am also
: > havieng the devil of a time gettign my new brokerage firm from taking my
: > best calculations of the basis of stocks I have held for a long time.
: > they keep trying to do research on old stock splits that my sone finds
: > easily on line, but they can't. this is a large, well known firm I will
: > not name, but it is driving me crazy!
: >
: > Wendy

: Wendy, this is exactly the point of my post and my concern as well.

: Can you tell them to just "forget about it"? If they are pre 2012
: purchases, it is none of their concern.

So what will they report when I sell something for which they have no
basis to report? Will they say basis ZERO(0) In which case, what do I do?

I am fairly along in years, but don't want to be so constrained by this
that I can't sell the stock during my lifetime until the basis goes up to
date of death, something I am not anticipating before the next downturn in
the markey:) I want to keep all my powder dry as well as my mind sharp
as long as possible:)

Wendy
 
W

W. Baker

: > I find a problem with using Turbotax when reporting gains. for some
: > reason it does not permit the use of the term "various" when giving a
: > basis. . . .

: I'm not sure what you mean by that. The basis cannot be "various." The
basis has to be a number. That is an IRS requirement, not a TurboTax
requirement.

Dates of acquisition as various.

: > . . . As I often have either several purchase dates(prior to 2012) or
: > reinvested dividends, I refer to use "various" rahter than have to list
: > every small transaction and I understand this is OK to do. Has anyone
: > using the taxpayer(as oppsed to a professiona) version of thturbotax found
: > a way to use "various?"

: The consumer version of TurboTax does allow "various" for the purchase
date. As soon as you type the letter V in the "Date of Acquisition" it
fills in the rest of the word. It's not clear why you are having trouble.

I will try using the "V" . It has never worked for me so far. I import
my numbers fromt he brokerage because my vision is no longer good enough
for me to copy all those numbers.

: If you want to pursue it, you would probably get the best help by
posting your question in the TurboTax support forum ("TurboTax
AnswerXchange") at https://ttlc.intuit.com/. In your post, explain the
exact steps you are using to enter the sale, and what happens when you try
to type "various" in the Date of Acquisition. Also state the exact version
you are using - online or CD/download, and which edition - Basic, Deluxe,
etc.

Thanks, I will try that,but have not had great success with getting
answers.

: By the way, there is no professional version of TurboTax. It is for
individual consumer use only. The professional software products from
Intuit are not called TurboTax.

Since I only preare one return these days, I hav eno need of the
professional versions so am not up to date on them. thanks for all your
advice adI will tryas I would hate to have to pay someone to do my returns
just because of this one thing.

: Bob Sandler
 
P

Pico Rico

W. Baker said:
: : > : On 8/9/2014 11:43 AM, Pico Rico wrote:
: > : > Taxpayer has some old share certificates in well known publicly
traded
: > : > companies. This was old school, but now needs to have the shares
: > listed
: > : > properly in her living trust.
: > : >
: > : > I am suggesting that the easy thing to do would be to have the
shares
: > added
: > : > to an existing brokerage account she has in her living trust.
: > : >
: > : > Question: will the brokerage mess up the basis? Share
certificates
: > have
: > : > dates on them - will the brokerage try to figure out the basis
(likely
: > : > erroneously) or will they just add the shares with no basis
: > information?
: > : > She could figure out the basis but that would take some doing and
she
: > : > doesn't have time right now. But she wants to get the shares into
her
: > : > living trust properly. Will the brokerage add today's date to
their
: > files,
: > : > or the dates on the share certificates, or no data info?
: > : >
: > : The broker's software may very well assign a basis and it is all but
: > : guaranteed to be wrong. Fortunately it doesn't really matter. The
IRS
: > : created Columns F and G on the 8949 because they knew the cost basis
: > : reported by brokers was often going to be wrong. This was a way to
: > : allow the taxpayer to make the necessary corrections and still let
the
: > : IRS computers avoid a mismatch between what the broker reports and
: > : the tax return. If the broker is really on the ball (not likely),
: > : they will notice the certificates were all issued before 2012 and
: > : will not report cost basis to the IRS when the stock is eventually
: > : sold. I wouldn't count on that. Form 8949 Columns F and G are your
: > : friend, don't worry about using them.
: >
: >
: > Just a bit more of a comlication to throw into this mixture . I am
also
: > havieng the devil of a time gettign my new brokerage firm from taking
my
: > best calculations of the basis of stocks I have held for a long time.
: > they keep trying to do research on old stock splits that my sone finds
: > easily on line, but they can't. this is a large, well known firm I
will
: > not name, but it is driving me crazy!
: >
: > Wendy

: Wendy, this is exactly the point of my post and my concern as well.

: Can you tell them to just "forget about it"? If they are pre 2012
: purchases, it is none of their concern.

So what will they report when I sell something for which they have no
basis to report? Will they say basis ZERO(0) In which case, what do I do?

I am fairly along in years, but don't want to be so constrained by this
that I can't sell the stock during my lifetime until the basis goes up to
date of death, something I am not anticipating before the next downturn in
the markey:) I want to keep all my powder dry as well as my mind sharp
as long as possible:)

Wendy
If the broker doesn't have the basis information (for an old purchase) they
will not show zero basis, they will show they don't have a record of the
basis. I can live with that. I prefer not to live with a broker trying to
make up a basis when they don't know it.
 
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J

jmfbahciv

W. Baker said:
: Wendy, this is exactly the point of my post and my concern as well.

: Can you tell them to just "forget about it"? If they are pre 2012
: purchases, it is none of their concern.

So what will they report when I sell something for which they have no
basis to report? Will they say basis ZERO(0) In which case, what do I do?

I am fairly along in years, but don't want to be so constrained by this
that I can't sell the stock during my lifetime until the basis goes up to
date of death, something I am not anticipating before the next downturn in
the markey:) I want to keep all my powder dry as well as my mind sharp
as long as possible:)
The 1099s from my stockbroker were split into two groups: Covered
and Uncovered. (These used to be footnotes in previous years.) The line
items in the covered sections will have the cost basis reported to the IRS.
The cost basis of the line items in the uncovered sections have not been
reported.


/BAH
 
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W

W. Baker

: W. Baker wrote:
: >
: > :
: > : Wendy, this is exactly the point of my post and my concern as well.
: >
: > : Can you tell them to just "forget about it"? If they are pre 2012
: > : purchases, it is none of their concern.
: >
: > So what will they report when I sell something for which they have no
: > basis to report? Will they say basis ZERO(0) In which case, what do I do?
: >
: > I am fairly along in years, but don't want to be so constrained by this
: > that I can't sell the stock during my lifetime until the basis goes up to
: > date of death, something I am not anticipating before the next downturn in
: > the markey:) I want to keep all my powder dry as well as my mind sharp
: > as long as possible:)

: The 1099s from my stockbroker were split into two groups: Covered
: and Uncovered. (These used to be footnotes in previous years.) The line
: items in the covered sections will have the cost basis reported to the IRS.
: The cost basis of the line items in the uncovered sections have not been
: reported.


: /BAH

: --

thanks, for that information. I will investigate with my brokerage firm.
Hopefully my concern is just a tempest in a teapot:)

Wendy
 

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