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Kendrick

TaxAlmanac

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If I just summarize stock sales on Schedule D, rather than attach a detailed schedule to a paper return or to an 8453, what is the worst that can happen?!?!?

See original discussion at http://www.taxalmanac.org/index.php/Discussion:If_I_just_summarize_stock_sales_on_Schedule_D%2C_rather_than_attach_a_detailed_schedule_to_a_paper_return_or_to_an_8453%2C_what_is_the_worst_that_can_happen%3F%21%3F%21%3F


I mean really, what would the IRS do? If they want a detailed schedule, let them send my client a CP2000 and ask for one, and then I will send it to them. I have been summarizing stock sales for my clients on Schedule D for 5 years now, and have never heard a peep out of the IRS.

Does anyone know what the penalty for not doing it the way the IRS wants me to do it is?

I really don't see the logic as to why they are making a fuss out of this all of a sudden. If I am going to have my client send an 8453 with a detailed schedule of stock sales, why e-file at all? May as well just send in a paper return.

It is this kind of thing that makes this business so frustrating some times!

( Asked 03/08/07 05:21 AM in TaxAlmanacViews by community 46 )

Answers (49)  Comments (10)  

Jancpa

TaxAlmanac

What would the IRS do? They would ask for the detailed information (far more likely now that they have clearly stated what they want and how). They would not penalize the taxpayer if the return was, after all, accurate. At the moment, there is no penalty for failure to provide this detail with the return.

That said, you have always been required to provide the detailed information.

If you have broker's statements with all of the required information, you can summarize the transactions on Schedule D and send in the statements with the 8453.

The IRS didn't so much change the rules as clarify them. When they said, at the end of 2005, that they wanted each transaction separately listed on Schedule D, the pronouncement wasn't exactly popular. They then compromised by letting folks go back to what they had essentially been doing already -- summarizing the transactions on the Schedule D and attaching the appropriate detail to the return (or 8453). At least, that's what everyone was supposed to be doing.

The point of e-filing was never to send less information. If you don't want to mail in an 8453 with the required detail, enter the individual transactions on Schedule D.

( Answered 03/08/07 06:27 AM in TaxAlmanac ,Views by community 46 )

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DZCPA

TaxAlmanac

I would not worry about the detail unless the IRS asks for the additional info.

( Answered 03/08/07 08:26 AM in TaxAlmanac ,Views by community 46 )

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Michaelstar

TaxAlmanac

Kendrick - there seems to be some bad advise being posted here in my opinion. Short cuts are not a good way to run a practice.

Has nobody read the revised instructions to schedule D - go to page D6, 2nd paragraph under the heading "specific instructions". It is very clear. Also last year the AICPA tax section put out an alert bulletin to bring this change in the instructions to peoples attention. Providing the detail is a requirement - not an option.........

( Answered 03/08/07 10:02 AM in TaxAlmanac ,Views by community 46 )

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LJACPA

TaxAlmanac

Would someone mind telling me what you mean by "summarized"? I have yet to have a broker statement this year that I could even attach, too much not complete or not reported in a manner to simply, "See Attached Schedule". I know there is a difference between that and summarizing, but I'm not sure what y'all mean. I will combine, e.g. 10 separate sales of XYZ Co. Is that what you mean? And, Michaelstar, is this not "an option"? I thought I understood this. Thank you.

( Answered 03/08/07 11:52 AM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

Before IRS backed down on attaching, or forwarding with Form 8453, detail in 2006 for the 2005 year, one of the speakers at a seminar I attended opined that IRS could claim the return could not be processed, and hence not filed. That was in early January 2006 but almost as he spoke, IRS recanted and permitted other schedules that give the same detail. Does anyone think such Draconian punishment couldn't be adopted?

We've all seen what happens when a brokerage sells a mutual fund held for years at that brokerage house: every reinvestment is split out with a computation of gain and loss and sometimes a total is not given. In cases like that it might be easier to copy and cut apart that part of the statement and paste it on something else [or try to scan it into Excel].

( Answered 03/08/07 01:02 PM in TaxAlmanac ,Views by community 46 )

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TxSrv

TaxAlmanac

> Does anyone think such Draconian punishment couldn't be adopted?

There's really no sensible way to raise a failure-to-file issue in processing. They can return the entire document to the t/p, stating an incomplete return is no return, but that potentially leaves them open to a waste of a nonfiler case should t/p not resubmit. If a refund return, that tactic will cause workload on the 800-number, and maybe thence workload for the Taxpayer Advocate. A t/p may also write to a member of Congress, and IRS must respond in writing defending its actions. If attachments can't be easily tied to what's on Sch D, the most they should do is send a letter asking t/p to do so. If no response, they're still wise to assess as timely, making any corrections within the statutory definition of math correction. They then have the option of referring it to the Exam function in the Center to look at, for disposition at their discretion. Any easy out for them is select on other issues, and let an Area Office examiner putz with Sch D.

( Answered 03/08/07 01:45 PM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

From many responders here, attaching the detail to 8453 is hardly ever done. It would seem that one smart reform for IRS would be to push the due date for the 8453 filing to October 15th or some date after the deadline. The purpose of the form has largely passed and now it is a way to transmit information, not to affirm the authorization to file electronically. That would be a carrot, but maybe with a more drastic stick if not done.

( Answered 03/08/07 01:56 PM in TaxAlmanac ,Views by community 46 )

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Lhhesscpa

TaxAlmanac

So, Kendrick, you into ignoring the rules? How do you do when you play the lottery? The audit lottery. -- Larry Hess, CPA, Albuquerque, NM (http://www.taxalmanac.org/index.php/user:Lhhesscpa) - Talk to me (http://www.taxalmanac.org/index.php/User_talk:Lhhesscpa)

( Answered 03/08/07 02:55 PM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

I file most of these returns by paper with the attachments. For one thing, many investors often also have many K-1s from PTPs and I believe there is a limit for efiling. Good brokers love these as investments, not just for the sheltering of cash that is part of it. There is nothing like seeing a Pennsylvania return, where you cannot staple it together, being held by a clasp with about 40-50 pages of K-1s, detail of stock, etc etc etc.

( Answered 03/08/07 03:03 PM in TaxAlmanac ,Views by community 46 )

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TJ

TaxAlmanac

If a client has too many security transactions to enter on a Schedule D, I also usually paper file the tax return. I usually cut and paste the gain/loss summary provided by broker and make my own summary sheet - takes a lot less time than typing in the sales on at a time. Most of the lagrer brokerage firms have excellent year end summaries.

Massachusetts mandates e-filing for most preparers, so I just e-file the retrun without the summary. I never have had a problem as of this writing.

( Answered 03/08/07 03:51 PM in TaxAlmanac ,Views by community 46 )

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PVVCPA

TaxAlmanac

I just consulted with Former President Clinton. According to him, it all depends on what your definition of "is" is. I do not think of it so much as breaking or ignoring the rules, but as making an executive decision between costs and benefits.

Example: When the client brings in 10 Goodwill receipts for $75-$100 each. Sure, I am breaking the rules when I just input them all as one donation dated July 1, 2006. But at the same time, I am also meeting my goal of efficently processing their tax return. I consider all risks (the 0.0000001% chance the IRS will say, "You did not do this the right way") and the reward (higher realization of my billable time).

( Answered 03/08/07 04:36 PM in TaxAlmanac ,Views by community 46 )

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  • JR1
  • TaxAlmanac
  • commented

And let's face it, they want a paperless system, too. Will continue my 8879's only.

( Commented 03/08/07 05:27 PM in TaxAlmanac ,Views by community 46)

PVVCPA

TaxAlmanac

California has the better system. They require the tax preparer to keep the signed forms and all attachments on file for 3 years (maybe it's 4?) in case they ever need to take a look. They were doing this years ago when we were having to mail all signed 8453's to the IRS. I cannot figure out why the IRS didn't adopt this idea when they decided to go "paperless".

( Answered 03/08/07 06:45 PM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

Or as I suggested above, use a different deadline for submitting the 8453 with attachments.

( Answered 03/08/07 06:47 PM in TaxAlmanac ,Views by community 46 )

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Wkstaxprep

TaxAlmanac

Kendrick, i agree its kind of liek in NYS they want you to attach a barcoded from on top of page 1, the software i use was only reeady with the barcoded sheet 3rd week of february, did nys think i was going to wait til march to file all the returns. i said the same thing i processed the returns and thought "let nys send taxpayer a letter saying they cant process return because its missing the barcode cover sheet

( Answered 03/08/07 08:24 PM in TaxAlmanac ,Views by community 46 )

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Wkstaxprep

TaxAlmanac

kendrick,

i see your average fee is $600.

have you developed a set minimum fee for new clients regardless of how simple it is? (i.e $300 minimum, even if only 2 w-2's and one 1099 ?

or is $600 average helped out by good fees from corporate returns?

Thanks

Will

( Answered 03/08/07 08:25 PM in TaxAlmanac ,Views by community 46 )

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TxSrv

TaxAlmanac

> I cannot figure out why the IRS didn't adopt this idea [what some states do] when they decided to go "paperless".

States have very different enforcement requirements with a low rate of tax. IRS, however, imposes much higher tax and has a policy of treating similarly situated t/p's uniformly. Both efilers and paper filers are similarly situated, as to just getting something processible in on time.

So I have this theory. When an efile is accepted, it is of course assessed, lump Sch D figures and all plus anything else requiring supporting paper. IRS cannot take attachments to 8453 later and do any sort of math error correction. It's an audit. However, junk attached to a paper 1040 can be analyzed and corrections to net gain/loss made without statutory notice, following Regulatory appeal procedures. Accordingly, the two classes of t/p's are being treated differently. So, it's not a matter of mere revenue, but uniform treatment. One solution is to newly ignore gibberish in support of mere totals on a paper-file return. T/p is in the same footing as jibberish attached to 8453, which of course are merely sent off to a Federal Records Center, available if audited. However, IRS is not comfortable with ignoring sloppy paper filings with statutory authority to make unappealable corrections.

So it sounds like what IRS has been struggling with is announcing requirements for what to attach for any Sch D detail, paper or efile. If t/p's comply, it tends to be self-enforcing.

( Answered 03/08/07 08:59 PM in TaxAlmanac ,Views by community 46 )

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Huh? Did you say gibberish or jibberish? I read your message twice and have no idea what you're trying to say.

( Commented 03/08/07 09:04 PM in TaxAlmanac ,Views by community 46)

Death_Taxes

TaxAlmanac

But since 1970 or so, I've never seen a math error on the details of a Schedule D [as opposed to computing the totals incorrectly back when returns were done by hand] and I submit 500 a year. Until the last couple of years most of these were by mail, not efile, and even today perhaps 200 of 500 will be sent in by mail. Yes, IRS has the opportunity to examine the flotsam attached to the return but I don't see it happening.

Yes there are CP-2000 audits for missing proceeds, but of actual 'bring your records in' type audits I have seen two: both involving the flipping of T Bills which ended in no change. And the CP-2000 audits happen to both efiling and mailed in returns.

Based on my experience, I've not seen different treatment. Maybe IRS employees are looking, and maybe I am SOOOOOOOO proficient that nothing is wrong, but if you believe the latter, I've a bridge you might like to buy.

( Answered 03/08/07 09:14 PM in TaxAlmanac ,Views by community 46 )

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TxSrv

TaxAlmanac

> But since 1970 or so, I've never seen a math error on the details of a Schedule D.

I have, on the IRS side. Does not happen that often at all, nor returns prepared by professionals (self-prepared occasional "pieces of work"). That is why I don't understand IRS' recent fussing in announcements and instructions. Returns can later be audited following the usual selection methods. Processing and audit functions are rather discrete functions. Exam says this stuff is simple, and you have 6213(b)(1). Processing says you try processing tens/millions of paper on insufficient staffing.

An oddity occurs where a Fortune 500 company files a basic 1120 with everything "See attached." Center can't find the balance sheet on a filing standing 10 inches tall, nor dare try. They are simply coded, math unverified, as "no balance sheet" class of 1120.

( Answered 03/08/07 09:37 PM in TaxAlmanac ,Views by community 46 )

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The State of PA lost the front two pages [read signature page] in 2004 on this monster ineligible for efiling, then made like I made the error. It must have come apart in their processing.

My statement meant I've never seen IRS give a math error notice on the details, not that none has ever been made. I used to wonder how they ever read my handwriting!

( Commented 03/08/07 10:04 PM in TaxAlmanac ,Views by community 46)

Stone0772

TaxAlmanac

The IRS will include the gross proceeds into the taxpayers return without offseting any cost basis to calculate gain and send your client a bill for taxes due, interest and penalty.

( Answered 03/08/07 11:08 PM in TaxAlmanac ,Views by community 46 )

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Bell

TaxAlmanac

I must be missing something here. If a client has 50 stock transactions, and they are on the D-1 page, can this not be efiled on the 8879?

( Answered 03/08/07 11:42 PM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

Yes, if they are on the D and D-1, Bell.....what they are talking about is listing something like Smith Barney Acct 3, Sales 249,000 Cost 225,000 Gain 24,000, where Smith Barney might represent those 50 transactions.

( Answered 03/08/07 11:45 PM in TaxAlmanac ,Views by community 46 )

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TADeback

TaxAlmanac

Yes, if you type them all in, the return can be efiled.

( Answered 03/08/07 11:45 PM in TaxAlmanac ,Views by community 46 )

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Thank you. I never do that. Didn't even know you could.

( Commented 03/09/07 12:19 AM in TaxAlmanac ,Views by community 46)

TADeback

TaxAlmanac

For 2001, I decided to waste some time and typed all of my daytrading transactions into Sch D (for other years, I've attached my Quicken schedules to Form 8453 or entered the totals on Sch D, using the dates 01/01 and 12/31). There were 12 full pages of Sch D-1 and 1/2 page of Sch D--about 316 transactions. When I finished, ProSeries told me I couldn't efile the return because there were too many Sch D transactions. I'll never do that again.

category:Asset Sales (http://www.taxalmanac.org/index.php/category:Asset_Sales)

( Answered 03/09/07 12:53 AM in TaxAlmanac ,Views by community 46 )

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DZCPA

TaxAlmanac

Some brokers do not have a gain/loss schedule for trades. Day traders will tend to sell all trades purchased during the year. I would summarize total sales and total purchase to determine total gain if that was the case. You have got to be crazy to enter each trade for one who traded a total of over 100 trades!! Save the client some money.

( Answered 03/09/07 05:48 AM in TaxAlmanac ,Views by community 46 )

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Michaelstar

TaxAlmanac

I have a client this year that had more than 350 trades - more input than anyone should ever need to submit themselves to - it's done and reviewed - it is required - until the rules change - it is what it is.

And to boot - the client transfered everything from one institution to another who then input the data cost basis incorrectly and then sold every single holding previously security held in the account - 24+ hours later to review all of this and your complaining! Clients rely on us to get it right - it is part of the business.

( Answered 03/09/07 06:06 AM in TaxAlmanac ,Views by community 46 )

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Bengoshi

TaxAlmanac

For day traders, don't you have to worry about wash sales limitations?

( Answered 03/09/07 07:26 AM in TaxAlmanac ,Views by community 46 )

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Wash sales??? Whats that????? Kidding

( Commented 03/09/07 07:48 AM in TaxAlmanac ,Views by community 46)

haha..I hate that dang wash sale stuff too DZ!

( Commented 03/09/07 07:52 AM in TaxAlmanac ,Views by community 46)

LJACPA

TaxAlmanac

May I ask again, when I input from a broker statement (those that could not be used to "See Supporting Schedule") and I input 10 sales of GE stock that took place within days making certain that S and L are correct, that's wrong? I didn't realize that the IRS was requiring each one of the 10 sales to be listed separately and I believe I'm giving more than some of you might be, correct? Thank you.

( Answered 03/09/07 11:40 AM in TaxAlmanac ,Views by community 46 )

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DZCPA

TaxAlmanac

You are suppose to input all transactions ....even if a day trader has 1000 of them. Some preparers do not do so and summarize the long term and short term. Your choice ..work for your client or work for the IRS. The net tax due is the same either way. No penlties I'm aware of for not listing them.

( Answered 03/11/07 06:35 PM in TaxAlmanac ,Views by community 46 )

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JR1

TaxAlmanac

So far, no mail has ever come from IRS that anyone is aware of for not listing the detail. When will they? We don't know? While they could claim it wasn't filed as noted above, the likely worst case is that mail comes asking for the detail, or initially disallowing the cost basis until the detail is submitted. Actually, I should be encouraging as many of you as possible to send the IRS ALL the detail to the point that they grow sick of it and finally say...you know what, hang onto the detail. We're good without it.

And so begins my campaign. Please, please, obey the rules, and send all the detail. My preference is that you'll staple the 57 pages to an 8453 and mail it in.

( Answered 03/11/07 07:02 PM in TaxAlmanac ,Views by community 46 )

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Mustu

TaxAlmanac

I just sent out a return for someone who has managed investment accounts with about 2,500 transactions. With this brokerage, they're able to download the gain/loss detail into excel and email it to me. I manipulated the data to get it into the format I wanted, attached all 30 pages to the tax return (in very small type) and sent it all to the client to send in. I hate the waste of paper, but if that's what the IRS wants then that's what they'll get. Because of the excel download it hardly took me any more time. I hope no one at the IRS actually has to look at the detail.

( Answered 03/11/07 08:10 PM in TaxAlmanac ,Views by community 46 )

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JR1

TaxAlmanac

Good for you Mustu. Spread the word.

( Answered 03/11/07 08:26 PM in TaxAlmanac ,Views by community 46 )

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PVVCPA

TaxAlmanac

Hear! Hear! I would also like to join the Anti Paperwork Reduction Committee. Sign me up!

Can we also put "See attached" on the 8283 and send them copies of all the Goodwill receipts?

( Answered 03/11/07 08:59 PM in TaxAlmanac ,Views by community 46 )

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Kevinh5

TaxAlmanac

Why not just send in a blank 1040 and write "See attached" and staple all the year's income and receipts on it? Would save a bunch of time.

( Answered 03/11/07 09:19 PM in TaxAlmanac ,Views by community 46 )

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Mustu

TaxAlmanac

I put the totals on schedule D as well as included the detail information that the IRS asks for (in the same format as schedule D). I don't see what's wrong with that. It does save time and gives the IRS everything that they ask for. The alternatives would be to just put the totals on schedule D or staple the brokerage statements to the tax return or actually type every single transaction into Lacerte.

( Answered 03/11/07 09:29 PM in TaxAlmanac ,Views by community 46 )

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PVVCPA

TaxAlmanac

There is nothing wrong with what you did. Except you should have used a larger font so that it would've been 100 pages instead of 30.

We forbid you from typing all transacations into Lacerte.

( Answered 03/11/07 11:07 PM in TaxAlmanac ,Views by community 46 )

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Michaelstar

TaxAlmanac

As I type, type, type away ALL transactions into Lacerte.... The largest one so far was 375 individual sales - d... that took along time...... Needed a nap afterwards. Glad Lacerte made new enhancements to this part of the program this year.

( Answered 03/11/07 11:11 PM in TaxAlmanac ,Views by community 46 )

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PVVCPA

TaxAlmanac

Michaelstar, we are gonna vote you off at the next tribal council.

( Answered 03/11/07 11:17 PM in TaxAlmanac ,Views by community 46 )

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I am for the new streamlined 8283 procedure, good one Paul! I am going to use some of my 1/2" staples on it also, hammer then ends down if I have too.

( Commented 03/11/07 11:33 PM in TaxAlmanac ,Views by community 46)

MsTwizz

TaxAlmanac

I just finished typing many day trader transactions on a Sch D. One question. How do I handle the "option premium adjustments?" Do I just add/subtract against the proceeds? Thanks,

( Answered 03/12/07 02:43 AM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

As I have noted elsewhere, I love sending these packages to Pennsylvania which asks that no paper clips be used for paper returns: Pa also wants all K-1s and all other state returns so today's client has five trading accounts with broker summaries of 15 pages, four K-1s, and MD, MA, VA, CA and RI returns in addition to their monstrosity......all paper filed and all held together with a paper clip....a large one albeit. This is the same client whose return fell apart in Harrisburg a few years ago and they could not find Page 1 & 2.

( Answered 03/12/07 03:18 AM in TaxAlmanac ,Views by community 46 )

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TADeback

TaxAlmanac

In addition to the regular electric stapler I've had for a long time and replaced once so far, last year, I bought a heavy-duty Swingline 270 stapler that will staple up to 70 sheets. I use it for those thicker return copies. It wasn't cheap, but I love having it when the regular staples aren't long enough. I no longer have to keep removing staples and keep trying to staple the thick copies.

( Answered 03/12/07 04:17 AM in TaxAlmanac ,Views by community 46 )

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Michaelstar

TaxAlmanac

I have one of those Tim Taylor stapler's that will staple 225 pages - although I have only had to use is less than a dozen times. I still keep it in the box and only bring it out when I need it so after maybe 12-15 years it is still new! No idea what the one in the middle of the three does put pulling those staples out takes a pair of pliers. It is so old it does not even have a Swingline # on it and I use that one often.

( Answered 03/12/07 04:43 AM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

I also believe you are not supposed to staple a New Jersey Corporate return....not sure, Pam does that work. But Pennsylvania wants no staples and I comply. I don't even use those ugly black foldover clips for the return. They want no staples, they get no staples.

Then there are the idiot states that want a COMPLETE copy of the Federal return (listening, Governor Schwarzenegger)(Minnesota too) and the only income that pertains is a 850 W-2 form, or a K-1 with $500 of rental income. For them I bring out the Stanley Bostitch sliding scale stapler...the type you need pliers for when you must remove a staple from the package.

( Answered 03/12/07 01:34 PM in TaxAlmanac ,Views by community 46 )

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I also have a 225 page stapler. I call it my "Gonzo Stapler".

( Commented 03/12/07 05:13 PM in TaxAlmanac ,Views by community 46)

Will

TaxAlmanac

I've got a Swingline 90002, fairly new like everything in my young practice. It will drive a 15/16" fastener through 210 pages of 20lb paper up to 2 3/4" in from the margin. Yeah baby. :)

( Answered 03/12/07 05:17 PM in TaxAlmanac ,Views by community 46 )

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  • JR1
  • TaxAlmanac
  • commented

I use a .300 Weatherby. No fastener left behind, but makes one helluva big hole for one.

( Commented 03/12/07 05:49 PM in TaxAlmanac ,Views by community 46)

PVVCPA

TaxAlmanac

JR1, then you can use a pretty rainbow ribbon to hold the return together.

( Answered 03/12/07 05:57 PM in TaxAlmanac ,Views by community 46 )

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  • JR1
  • TaxAlmanac
  • commented

LOL!! Ohhhh, I get it now...now ROTFLMBO!!!!!!!!!

( Commented 03/12/07 05:57 PM in TaxAlmanac ,Views by community 46)

Xenon16

TaxAlmanac

So you guys that type in all 350 transactions...do you charge the client for this? Time or per entry? Either way, how do you justify this as your "expertise" in tax compliance? Because the next guy doesn't do exactly as the instructions want by listing out each individual transaction.

For many years, we have been attaching the 1099 or the sales summary to the Schedule D. The Schedule D always reconciles to the attachments.

( Answered 07/23/09 09:34 PM in TaxAlmanac ,Views by community 46 )

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Dhtax

TaxAlmanac

I'd be happy to mail in or attach the brokerage statement, but that doesn't fulfill the requirement either, which says that the info must be in Sched D format, so why bother? If I'm going to put it in sched D format I might as well type it in to the software. So for clients with 20+ trades I do one of three things, and the IRS has not yet complained:

1) Send just the summary figures, no backup 2) If the client will pay for the data entry I do it -- usually $3/trade 3) Some brokers will send the info in spreadsheet form which I can suck into my software. If so, I charge a flat fee -- it takes some work.

The IRS should require brokers to provide statements in sched D format. This would be an easy format change since it's data they are already providing.

I understand that in the future brokers will be required to provide basis info to the client and the IRS. I don't see why they don't require that right now, with an exception for cases where the broker doesn't have the info. Again, it's data the broker is already giving to the taxpayer. There may be some inconsistencies, eg average cost basis or adjusted price on bonds, but it would still be better than what we've got now.

( Answered 07/24/09 02:55 PM in TaxAlmanac ,Views by community 46 )

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TAFsteincpa

TaxAlmanac

Other than for very old accounts, with todays technology, there should be absolutely no reason that the brokerage accounts can't account for both sale price and cost. And cost can and should be summarized in the various allowable cost categories. specific identification or average cost.

If there is a regulation that when transferring securities between brokerages, that the cost info is also required to be transferred in, it will be done. Yes, the new brokerage who manages the money wants to track how they did, and sure, do this, but this is just an additional cost column in their program.

If a client is transferring stocks in, they should be required to provide the basis as they have it.

This isn't and shouldn't be rocket science. Simple administrative work requirement for the companies that handle the accounts. If they cannot provide this information, make them find a different line of work.

I truly hate charging clients a few hours of my time for something that should be simply summarized by these brokerage houses. Simple friggin common sense.

( Answered 07/24/09 04:45 PM in TaxAlmanac ,Views by community 46 )

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Death_Taxes

TaxAlmanac

I think what David is talking about is that some brokerage accounts lump short and long term together, marking short with 's' and long with 'l.' Some put the cost on the left and proceeds on the right and others have arcane methods. With efiling, I print the 8453 and send this information to Andover after summarizing on the Schedule D. I have had packages with over 50 pages of transactions, since many of the firms delineate each share bought when selling a mutual fund.

( Answered 07/24/09 04:57 PM in TaxAlmanac ,Views by community 46 )

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TAFsteincpa

TaxAlmanac

And what I am saying is that these companies should be required to track and put this information in the format that the IRS is requiring. There really is no need for us to have to do this digging and research thereby costing our and their clients this additional money.

Cost tracking by brokerages should be a relatively simple thing. If I can track depreciation with a program that can spit out 7 to 12 different methods, the technology is there for these firms to track multiple costs as well.

( Answered 07/24/09 08:20 PM in TaxAlmanac ,Views by community 46 )

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