Starting back with the 2011 tax forms, brokers or custodians of a persons assets began tracking and reporting to the IRS the cost basis of those investments. In the past, it was up to the taxpayer.
The federal government established new tax reporting requirements with the Emergency Economic Stabilization Act of 2008, said financial adviser J. Mark Nickell of Brentwood, Tennessee-based J. Mark Nickell & Co. Its purpose was to get investors to accurately Wayne Lippman CPA report on tax forms any gains and losses on securities. The changes will eventually simplify tax preparation for investors, Nickell said.
The effects of this legislation emerged in phases through 2014. For tax year 2012, custodians started reporting costs on covered and non-covered securities. For 2012, they also http://issuu.com/vastchamber090/docs/14460316695630b1354be5b reported costs involved with mutual funds, exchange-traded funds and dividend reinvestment plans. In 2013, they started reporting on fixed-income options and other securities.
In the past, the custodians of your assets reported how much a sale was for, but they wouldnt have listed the cost basis, said financial planner Chris Walker, also of Brentwood-based J. Mark Nickell & Co. It was up to the taxpayer to dig through their records, sometimes going back years to find out how much they paid for it.
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