Did you have any stock transactions in 2011?
This Mid-February everyone will get a nice surprise when they open up the newly revised 1099-B from their brokerage accounts. Regulations are requiring that brokerages keep up with and report cost basis information on securities bought and sold after January 1, 2011. Prior to the brokerage firms keeping up with the cost basis, it was up to the taxpayer to keep up with this and report their gains and losses to the IRS. This was a nightmare for those preparing tax returns where the taxpayer was too busy to keep up with their cost basis on stocks purchased over a long period of time. To make the matter worse, clients that went from brokerage to brokerage would lose information on their original purchases. The new rules will help both tax preparers and taxpayers when it comes to the reporting of gains/losses in stock sales. As part of an ongoing process of making the brokerage firms keep up with cost-basis on stock sales, the 2011 1099-B will feature several new changes such as a box for date of acquisition, cost basis, amount of loss disallowed due to wash sale, whether the property sold is a non-covered security, and whether the gain or loss is long-term or short-term. If you have any questions when you receive your 1099-B you can contact us and we will be more than happy to help you out.