Broker 1099 and basis reported to IRS and wash sales

Linda on

Dividend reinvestment definitely complicates the reporting in the investment club environment. If all shares were sold, the broker should add wash sales to the cost basis. Not all make this adjustment.

You may need to email copy of 1099 to Bivio to alter entries. They may not alter price and cost to match exactly but if the net gain or loss matches the results will be ok. You can attach a statement explaining the discrepancy.

Linda

Sent via the Samsung GALAXY S(R)4, an AT&T 4G LTE smartphone

-------- Original message --------

From: "Gee, Norman" <Norman.Gee@LC.CA.GOV>

Date:03/02/2015 12:00 AM (GMT-05:00)

To: club_cafe@bivio.com

Cc:

Subject: [club_cafe] Broker 1099 and basis reported to IRS and wash sales

On our broker 1099, they now report the basis to the IRS. I am having a hard time making my proceeds and cost basis match the 1099 report. I also have a number of items mark with a wash sale adjustment. The problem is that all of these stocks were ones that we sold all of the shares but there was dividend reinvestment that happen within 90 days of the sale. Some of the wash sales adjustment appear in the long term transactions. We did not buy any more shares after the total sale. Shouldn't I be able to claim those loses? Since I no longer hold those shares.

Would eliminating dividend reinvestment simplified the lots reporting?

Laurie Frederiksen on

Hi,

Automatic Dividend reinvesting complicates your record keeping immensely. This is even more obvious because of the new cost basis reporting requirements.

Here are some of the types of issues it creates:

Automatic Dividend Reinvesting

In our experience, for most clubs, "automatic pilot investing" like this ends up being way more work than they want to spend the time and energy working on.

Save up your dividends and keep invested by making conscious decisions to purchase full lots of stocks rather than trying to automate the process by purchasing teeny tiny fractional lots every quarter.

For help working through your issues, you'll need to send an entire copy of your 1099 as an attachment to an email to support@bivio.com. For the most efficient service, also identify specific stocks where you are seeing the discrepancies.

Laurie Frederiksen
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Would eliminating dividend reinvestment simplified the lots reporting?

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