Dear Client:
Previously, we notified you, in conjunction with sending out your original 1099-B Statement, that the new IRS cost basis reporting rules, and the delays associated with processing trade data to accurately reflect the cost basis for your 2011 trades, may cause TradeStation to issue an amended 1099-B Statement.
We have now determined that some customers, including you, might have received incomplete information so we will be issuing an amended 1099-B Statement as soon as possible. Unfortunately, it does not appear that the amended 1099-B Statement will be issued prior to the April 17th tax filing deadline. As you know, we cannot give you tax advice, so we encourage you to speak with your tax advisor to determine how best to manage your tax filing obligations, including whether it makes sense to file for an extension or, alternatively, amend your tax filing once you receive the amended 1099-B Statement.
For non-tax related questions, call our Client Services Department at 800.822.0512 or 954.652.7900.
We apologize if this delay has caused you any inconvenience and we thank you for your understanding and patience.
Sincerely,
William P. Cahill
President & Chief Operating Officer
TradeStation Securities, Inc.
We have good reason to believe - can't say how - that the IRS is very behind the curve here and they don't even realize that 1099-Bs are a disaster this year on cost-basis reporting. While we hoped to get relief from the IRS on this matter, we learned we first need to educate them on the problem. And, they will need to see it for themselves. The early bird tax return filiers won't get the worm, they will get audited.
Hold your powder, file an extension and stay tuned.
We have good reason to believe - can't say how - that the IRS is very behind the curve here and they don't even realize that 1099-Bs are a disaster this year on cost-basis reporting. While we hoped to get relief from the IRS on this matter, we learned we first need to educate them on the problem. And, they will need to see it for themselves. The early bird tax return filiers won't get the worm, they will get audited.
Hold your powder, file an extension and stay tuned.
Let's say by the end of the calendar year, the 1099's STILL are wrong.
At some point, you have to file.
I know my numbers are correct. I know the 1099's are wrong.
In a discrepancy, you have to pay what is right.
Why not file & if the IRS has any questions, show them your trade history, which they have anyway from your 8949's, and they'll see you're correct?
In an audit, you'd owe nothing because you did your taxes correct.
I don't even see why you'd get audited when you give them all the info and everything matches except for the faulty 1099's which aren't my responsibility.
You can't file based on 1099's, you file based on your trades.
Why will updated 1099-B's effect your tax filing?
You can figure your taxes today & know what you owe.
Any changes on the 1099-B's won't change the amount you owe by 1 penny.
Agree with you, but still think it's better to wait for final corrected 1099-Bs, so you can at least reconcile to those 1099-B amounts and show that adjustment/plug number on Form 8949 - if it's large, otherwise no plug number is better.
Hopefully, within 4 months, the brokers will fix 1099-Bs better and the IRS will wake up to the problem and stop their tax-notice presses.
Why rush to get a tax notice, when you can wait and hopefully not get one?
Tax notices can be disturbing and the IRS can go fishing on your expense. It can lead to unending questions about wash sales, trader tax status Sch C expenses and much more.
Tax exams are the worst and the IRS is starting to get out of control again on them again.
I've noticed a problem with E*Trade 1099-Bs. Apparently they used specific lot identification IF you identified the lot prior to the trade. However, if you identified specific lots AFTER the trade (but before settlement), the 1099-B uses FIFO instead of the specific lot. The system itself has the correct tax lot identification when you log in, but the 1099-B doesn't reflect the specific lot identification.
This appears to be a systemic issue rather than an isolated mistake, but I'm still plugging through 50 or so pages on a line-by-line basis.
Am I correct in assuming the issue is soley to do with the wash sale adjustments? I see on one of my 1009's that the broker increased the basis for every potential wash sale, and reported a cumulative number for all the disallowed losses. What the point of all that was is beyond me. Adjusting for those disallowed losses will not obviously produce a correct net, since there could have been considerable double counting.
