Tax Help with 1099-B

[wjrusnak 10]

So who is familiar with filing 1099-B for trading stocks? Thus far I have found that brokers send you the 1099-B form and it only lists your sales, leaving it up to you to match them with the appropriate buys and report each trade on a separate 1099-B (talk about horrible when dealing with hundreds of trades). This isn't easy. I feel like I did alright for the matching part, but I know I have to have made a mistake with some of the "wash sales" -- which seem to be losses excluded from deduction because you bought the same amount within 30 days.

 

Now I know every sale that my broker reported to the IRS has been accounted for, but say I did make a small mistake on the wash sales...how strict is the IRS on a mistake? I just don't want my refund to be held up due to a stupid minute mistake.

 

Anyway, I think this should be the last time I have to deal with equities taxes. What a mess. Futures 60/40 sounds like the way to go. Let me know if anyone else has a better method to reported the sales (and matching the buys) for equities. Thanks.

 

-- Bill

[brownsfan019 17]

Bill - good question. Who knows exactly what might cause your return to get flagged. My best guess based on experience is that if it's close enough, you'll probably get through fine. If there are huge discrepancies, expect a friendly letter in the mail. That happened to me last year actually - the state of OH sends me this big letter in the mail saying I owe a bunch of money. When I looked at their findings, THEY had transposed a number incorrectly that turned my return into a big problem from their point of view.

 

Anyways, point is that you can do the return perfectly and still get flagged. Just do your best, save all documents and then cross your fingers. Or find a qualified CPA and let them take care of it.