3 ms·
> Which bunch of shares did you sell? Was it a short term gain or a long term gain? Was it a loss? It depends. Neither your broker or IRS knows the answer, but
by jjav 4y ago
> Which bunch of shares did you sell? Was it a short term gain or a long term gain? Was it a loss? It depends. Neither your broker or IRS knows the answer, but you do.
Your broker does know because you need to tell them which ones to sell when you sold.
The IRS also knows because that's included in the cost basis reported to them by the broker. (This changed some number of years ago, brokers used to only report the income from the sale but not the cost.)
https://www.spencerlawfirm.com/2011/01/new-cost-basis-reporting-rules-effective-january-1-2011/ https://www.spencerlawfirm.com/2011/01/new-cost-basis-report...
- ryandrake 4y agoInteresting. I learned something today. Thanks.
- seanp2k2 4y ago...and therefore there is even less reason for the IRS to not pre-fill forms or just have an exception-based filing system vs everyone has to file regardless of exceptions / amendments / challenges etc.
- jjav 4y agoI should add to this, even though the broker reports the cost basis, be proactive in verifying that it is correct. For reasons I can't comprehend, ETrade reports the costs basis wrong every single year on all my RSU and ESPP sold shares. They do issue a supplemental report which has all the correct info, but the 1099-B has it wrong. It is maddening. I need to send both the 1099 and the supplemental doc to my CPA so things are accounted correctly, otherwise I'd pay a lot more taxes due to ETrade errors. All other brokers I deal with do it correctly.