Future (2011) Good News Proposed - By the IRS!

I know it may not seem like much to everyone, but the IRS has issued proposed regulations that will require stock brokers and mutual fund companies to report to you and the IRS the cost and gain/loss information for stock purchased beginning in 2011.
This change will significantly reduce your bookkeeping burden. Beginning with your 2011 tax year, you'll receive the data you need to more easily determine your gains and losses.  Currently, you have several methods available for you to select in determining how to calculate your gains and losses including specific identification, averaging or FIFO.  These different methods often yield dramatically different results - affecting cash in your pocket now!  It will be interesting to see how these will be dealt with in the final regulations.

Form 1099-B, long used by brokers and mutual funds to report sales prices, will be expanded in 2011 to include the cost or other basis of stock and mutual fund shares sold or exchanged during the year and whether gain or loss is long-term or short-term, a very important factor affecting the tax treatment of gain or loss.

If you'd like to give any of your thoughts about these changes to the IRS, you have until February 8, 2010, either electronically, by mail or hand delivered to the IRS. If you are really passionate about it, and want to share your thoughts in-person, a public hearing is scheduled for Feb. 17, 2010, at the IRS New Carrollton Federal Building, 5000 Ellin Road, Lanham, Maryland 20706.

Bookkeeping for tax gains & losses on stock and mutual fund trades is often time-consuming and can cost clients several hundred dollars more in fees for tax preparation, if left to your CPA to do the work.  Even now, for the 2009 tax season, you can reduce your tax prep fees by gathering your purchase information for all your securities purchases and summarizing it in spreadsheet form (I can give you a practical format).  This will prove useful and will continue to keep tax prep fees lower year after year.


Contact me:
kfolberg@mynetcpa.com
(262) 421-1170 Office
(877) 277-7151 Fax