what are the chances of my friend being audited

[DDaccountant]

I am doing taxes this year for the second time, i was going to prepare my friends taxes, but he is not doing anything he shouldn't do but even then he is fearful he could be audited because he had borrowed a lot of money from his brokerage firm using margin to buy some gold ETFs but as you know the value of gold in 2013 plummeted so they force him to sell, forcing him to realize nearly $20,000 in losses and his only income is like $1400 dollars, he is a dependent, I know the Irs singles out very large deductions, but will they still do that even though clearly NONE of the losses will help him because he didn't even make the amount of the personal exemption, and supposedly the IRS gets a copy of the 1099B confirming such huge losses

 

[kirby]

He need not worry about the audit because he has a rock solid document (the 1099B) proving the loss. On your part , you need to be crystal clear on how loss carryforwards are handled on his tax returns.
Sorry about his loss......