IB Wash Sale Help - Tax Data Date

Discussion in 'Data Sets and Feeds' started by JackR, Jan 21, 2011.

  1. JackR


    FYI from an IB Communique:

    As of January 1, 2011, your cost basis on all statements will include Wash Sale calculations as required by the IRS. To help you transition to this new calculation, your cost basis with Wash Sale calculations will also be available on your monthly and yearly statements for the year 2010, retroactively.


    2010 Tax Reporting Dates Available
    It's tax reporting time once again. For ease of reporting, we are now distributing a Consolidated Forms 1099 which includes your 1099-INT, 1099-OID, 1099-DIV, 1099-B and 1099-MISC. The Consolidated Forms 1099 will be available by February 15, 2011.

    If this is your first tax year with IB - You have to download the 1099 from the Account Management page, IB doesn't mail.

  2. Bob111


    what about Sch D? is it available?
  3. JackR



    I don't know. Just got the Communique. But based on past years, they'll post it at the same time they post your 1099.

    It will be interesting to see how the wash sale implementation is received. Despite the ocassional glitch, their tax stuff seems to be OK. Luckily, I generally trade futures so I have few stock or option transactions to track. Futures, as you know, are easy to report.

  4. Bob111


    wash sales are in Sch D PnL calculations..at least they are use to be in it. rest of the forms are not really relevant for tax purpose since they all derived from Sch D PnL
  5. JackR


    I'm sure I have no wash sales but seems you might. Why not look at some of your earlier statements and see if IB has made the retroactive changes they said they were going to make.
  6. MR.NBBO


    Seems IB is ramping up for the new reporting requirements, as manadated by the IRS, for cost basis.

    Problem here, is I don't see MTM as an option for customer reporting. I also see serious flaws in the Sched D IB prepares, which appears wash sale adjusted.

    This is really a bad idea by the IRS. How does the broker account for other brokerage accounts you have elsewhere, or like-kind transactions?

    This to me looks like huge footnotes to a tax return, explaining why the broker's tax basis is not correct. It's burdensome on the
    broker, it's burdensome on the taxpayer, it's burdensome on auditors, who will erroneously think the broker's version is correct...which is by no means the whole picture, leaving you to try to defend it.
  7. JackR


    The law as it now exists, what it covers, and when it will be implemented (I think):

    -- All equity stock acquired on or after January 1, 2010.
    -- All mutual funds and dividend reinvestment plans (DRiP) shares acquired on or after January 1, 2012.
    -- Other specified securities types, such as debt issues, options, private placements acquired on or after January 1, 2013.

    In order for a security to be subject to cost basis reporting it must be a “specified security” that is also a “covered security” under Internal Revenue Code. The rule defines specified securities as any stock in a corporation; any note, bond, debenture, or other evidence of indebtedness; any commodity, contract or derivative with respect to a commodity and any other financial instrument (if the IRS so chooses). The IRS defines a “covered security” as a specified security acquired on or after the applicable effective date but provides an exception for pre-effective date securities that are transferred to another account or broker.

    Don't see what effect it will have on MTM. Always a special rule.

    So if you buy 200 XYZ at Brokerage A and transfer to Brokerage B the basis will be transfered.

    I don't think you can, for tax purposes, buy ABC at Brokerage A and sell an equal amount at Brokerage B out of a different pile. I think you'll be forced to use the Brokerage A basis.

    However, we submit one Schedule D to the IRS. It is an accounting of all our transactions across one or more firms. As long as the totals of the multiple 1099-Bs add there should be no big deal. Over the years I have adjusted the basis of some long-term stock holdings to handle option premium I collected by selling against the stock. Never a problem as the brokerage firms have never reported option transactions to the IRS. I'm not sure if you must adjust your basis. It is normally beneficial as it lowers your tax liability by lowering the basis of the stock by your short-term option gain. Thus, allowing a lower tax rate. We shall see.

    In the future some folks may be in for a surprise if they have been a little sloppy in keeping track of their purchase price for Schedule D purposes.

    If you've got decent records I don't think you'll have much trouble with the IRS.

  8. cam


    Schwab reports the P&L for each trade . This is as per the new IRS reporting requirements. I don't know if IB does this or not. For MTM there should be no problem as long as you don't hold securities on Dec 31, going into the suceeding year. If you do, as per Schwab they will report only the transactions that actually occured during the preceding year and not mark to market. It is upto you to mark these securities to market.
  9. I saw a good post about the new cost basis at this site:


    I used these guys last year for my schedule D as well. They did a good job fast.
  10. samovar


    I just downloaded Schedule D from IB (Report Management -> Tax Forms), and it does list three wash sales (1 stock, 2 put options).

    I hope it does the wash sale detection to IRS's liking, even though this article says:

    #10     Mar 9, 2011