Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
What happens when 1099-B is missing or totally messed up?
Posted by: Sasha, February 23, 2017 02:43AM
This week I received 1099-B of Baxalta that was spun-off from Baxter on 7/1/15. I dripped in Baxter from Sept'13 until Apr'15. I sold Baxalta shares in Mar'16, hence the 1099-B.
During the spin-off I received a share of Baxalta for each share of Baxter and used the company's provided method of allocating the cost basis between the two (55.2% for Baxter & 44.8% for Baxalta) as communicated here [investor.baxter.com].
So, I just multiply the original cost of each purchase by 44.8% and that's my cost basis for Baxalta. Agree?

Well, Computershare shows that I sold at Loss when actually it was a small gain. I called to ask why half of the individual purchases show totally overstated cost basis vs. the other half that's reasonably correct (by my calculations) on the detail page. Customer rep submitted an inquiry to the back office, but she advised me to seek help from a tax adviser. I asked her how that tax adviser can help me if the info is wrong on 1099-B.

My questions:
If I'm not issued a corrected 1099-B until after April 15 or if at all, can such a faulty 1099-B trigger an audit?
Should I choose the adjustment code B on Form 8949 and show the gain because I'm 99% positive I'm correct?
If I receive a corrected 1099-B after April 15, will I need to file an amended tax return just to show the new info of 1099-B but my calculation of the gain will not change?

Finally, what if I sold a stock but I don't receive a 1099-B at all or after April 15? Maybe postman delivers to the wrong place or something. The 1099-B isn't posted in my account either, but the phone message says it was mailed prior to 2/15/17. Nobody answers the phone either.

I just hope I don't need to do amended returns for Fed and State.

Thank you.

Re: What happens when 1099-B is missing or totally messed up?
Posted by: kaneohe, February 23, 2017 04:51AM
There are a number of ways you might handle this:
file an extension to file which will give you an extra 6 mos. You will still have do estimates of your taxes and send in anything due. That might help with having to amend.

Or you could file before 4/15 (or 4/180 using your best
guess for numbers. And then amend after you get the
corrected. Amending is not that bad.... might be good for the experience.

btw.....I think your basis assumptions are correct
and correcting w/ the B code would work.

Re: What happens when 1099-B is missing or totally messed up?
Posted by: Sasha, February 23, 2017 03:57PM
Thank you for the response. I'm leaning to go with the 2nd choice. Hopefully, I'll get correct 1099-B by April.

If I must do an amended tax filing, are all the same forms (1040, Schedule B, 2441, W-2's) supposed to be redone again along with the corrected changes that I'd need to show on 8949 and Schedule D.

In case you have a link to learn about filing an amended tax filing (what's needed and how it's done) on the high level for a rookie, I'd appreciate if you can share it. If not, that's fine, I'll google in late March as I still keep my hope alive for the correct info before everything is due.


Re: What happens when 1099-B is missing or totally messed up?
Posted by: kaneohe, February 23, 2017 04:34PM
I don't know the mechanics of doing an amended return if you're using software. Presumably it knows whatever you've entered and you tell it what you're changing so in my mind not much data entry.


The bird's eye view is that you need the recalculation of the taxes using the revised info and all the old correct data. IRS doesn't want to see all that gory detail again so there is a 1040X form that has 3 columns. The first is the original info for certain key lines; the last is the revised info, and the middle is the change. On the second page of the form you have a short narrative discussing what changed and perhaps why. You submit the 1040X and only the forms that changed.

You can google the 1040X and instructions to learn more.
The other thing is to not file the 1040X too close in time to the original 1040. Allows the 1040 to get into the system first.

Re: What happens when 1099-B is missing or totally messed up?
Posted by: Sasha, February 23, 2017 06:36PM
Oh, great. I'll check it out when I think I need it.
Nope, I'm a paper and pencil person, so I'd probably do on paper. I use Free Fillable Forms for the regular return.

I would assume that if Computershare doesn't send a corrected 1099-B I don't need to file an amended return. The same goes for the 1099-B that I haven't received yet. I'm obligated to report all as I sold stocks, but I'll use my records to complete my taxes as best as I can.

You were very helpful and I appreciate your, Kaneohe, time.



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