Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
1099-B
Posted by: stewartb, February 19, 2017 07:28PM
I sold all 100 sh of inherited Cal Amp Corp stock on 3/24/16 for $645.00. I inherited the shares as of 9/3/15, but actually acquired the shares 10/12/15 a little less than 6 months held. The average sale price for all 100 sh on 9/3/15 was $313.00, a capital gain of $332.00 I just received the 1099-B with some questionable items.
The first box has an "X" underneath "Applicable check box on Form 8949". Is that correct?
Box 1b Date acquired is left blank. Shouldnt it have the date of death 09/03/15 or date acquired 10/12/15?
Cost or other basis is left blank
Box 5 Check if noncovered security is checked. However in reading about noncovered securities that only applies to shares acquired before year 2011, so why is it checked if I inherited the shares in 2015?
If I dont get a corrected 1099-B isnt that going to trigger an audit if put I inherited the shares 09/03/15 and they mistakenly checked "Check if Noncovered security"?

Re: 1099-B
Posted by: kaneohe, February 19, 2017 09:55PM
stewartb Wrote:
-------------------------------------------------------
> I sold all 100 sh of inherited Cal Amp Corp stock
> on 3/24/16 for $645.00. I inherited the shares as
> of 9/3/15, but actually acquired the shares
> 10/12/15 a little less than 6 months held. The
> average sale price for all 100 sh on 9/3/15 was
> $313.00, a capital gain of $332.00 I just received
> the 1099-B with some questionable items.
> The first box has an "X" underneath "Applicable
> check box on Form 8949". Is that correct?

A. yes, see the 8949 form on p.2. You will check Box E
for Long Term and no cost basis reported by broker to IRS

> Box 1b Date acquired is left blank. Shouldnt it
> have the date of death 09/03/15 or date acquired
> 10/12/15?

A. No, you put INHERITED for date acquired

> Cost or other basis is left blank

A. Put in your FMV value on date of death

> Box 5 Check if noncovered security is checked.
> However in reading about noncovered securities
> that only applies to shares acquired before year
> 2011, so why is it checked if I inherited the
> shares in 2015?

A. For some reason, it appears that inherited stocks are
considered non-covered. [finance.zacks.com]


> If I dont get a corrected 1099-B isnt that going
> to trigger an audit if put I inherited the shares
> 09/03/15 and they mistakenly checked "Check if
> Noncovered security"?





Re: 1099-B
Posted by: stewartb, February 20, 2017 03:23PM
Thanks for the quick reply but i have one question on your first statement re: Form 8949:
You say,
"yes, see the 8949 form on p.2. You will check Box E
for Long Term and no cost basis reported by broker to IRS"

How could this be "Long Term"?

I inherited the shares 9/3/15, sold them 3/24/16, appx. 6 months.

Isnt that short term?
Shouldnt I only be using page 1 of form 8949?

Re: 1099-B
Posted by: Art, February 20, 2017 06:48PM
By law, inherited property is deemed to be held long term. Hence the advice to enter "INH" for acquisition date.

Re: 1099-B
Posted by: stewartb, February 20, 2017 07:04PM
"By law, inherited property is deemed to be held long term. Hence the advice to enter "INH" for acquisition date."

Are you sure inherited property sold 6 months from acquisition date is deemed "long term"?

Do you have any references to site this determination?

Thanks

Re: 1099-B
Posted by: kaneohe, February 20, 2017 07:24PM
Google and ye shall find:
[www.google.com]

Re: 1099-B
Posted by: stewartb, February 20, 2017 07:39PM
Once again thanks for the quick reply and accurate info. I almost don't need to go to an accountant!!!

And here I was thinking this was a mistake on the 1099-B that the broker had made, leaving out 1b. Date acquired & checking 5. Noncovered security.

Thanks all!!

Re: 1099-B
Posted by: stewartb, February 22, 2017 11:20AM
I noticed Computershare had "Net Proceeds" checked in the upper left hand corner. What does that mean? I had a few dollars in mailing costs to transfer the shares first in my name and then sell. Wonder if I can & it pays to deduct these minimal costs & how I would show them.

Re: 1099-B
Posted by: kaneohe, February 22, 2017 01:22PM
[www.irs.gov]

Apparently brokers can report either gross or net proceeds. As an example, you buy and pay 1000 for stock itself and 50 in allowable fees (commissions,etc.)
Your basis is 1050.

You then sell for 2000 but allowable fees of 100 are imposed. Broker can report gross proceeds of 2000 in which case you add the 100 in fee to basis to get new basis of 1150. Your gain is 2000 less 1150 = 850.

Alternatively broker can report net proceeds of sale as
1900. Your gain is then 1900 less 1050 = 850 the same as above..........so the end result is the same but accounted for in different ways. I believe most brokers report net proceeds.

You'll have to see if that explanation fits w/ what you see and if your expenses fit in the "allowable" category. If they are not allowble for this purpose, they may fit in the miscellaneous expenses deduction to be itemized on Sch A.......practically may be of little or no value since subject to threshold of 2% of AGI before you can use the excess as itemized deduction.



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