Cost Basis and 1099-B/Taxes

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mmicha
Posts: 23
Joined: Wed Feb 13, 2013 9:13 pm

Cost Basis and 1099-B/Taxes

Post by mmicha » Sun Mar 02, 2014 12:03 pm

Hello,

I am trying to do my taxes, and I am using Turbo Tax. It allows you to import forms from various banks and financial institutions.

Last year I transferred a bunch of funds to Vanguard Brokerage. I then sold them and received a 1099-B form from them. However, I have one fund that was sold that apparently has incomplete cost basis and I don't know how to address it. It doesn't seem to be the whole amount. I sold 89.0180 shares... However, the 0.0002 shares have a problem.

When I look at Vanguard's site or my 1099-B form, I see the following, however I've never sold mutual funds or stock before:

Date Sold: 4/1/2013
Fund: SUWIX (DWS Core Equity Institutional)
Shares: 89.0178
Total Cost: $1,523.47
Proceeds: $1,810.21
Long Term Gains: $286.74
Total Gain/Loss: $286.74
--
Date Sold: 4/1/2013
Fund: SUWIX (DWS Core Equity Institutional)
Shares: 00.002
Total Cost: blank
Proceeds: $0.00
Long Term Gains: blank
Total Gain/Loss: blank

Thanks for the help!

livesoft
Posts: 58272
Joined: Thu Mar 01, 2007 8:00 pm

Re: Cost Basis and 1099-B/Taxes

Post by livesoft » Sun Mar 02, 2014 12:08 pm

If you import the 1099-B into your TurboTax, what does TT do?

You are allowed to have one line for each of these on your Schedule D (or whatever than new form is). It is OK to have 0.002 shares on one line. TT will probably round it down to 0. And certainly the cost basis will round down to 0 and the sales proceeds will be 0 as well. So no worries.
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cherijoh
Posts: 4223
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Cost Basis and 1099-B/Taxes

Post by cherijoh » Sun Mar 02, 2014 12:17 pm

I think the issue is that the brokerage is showing data to 4 significant digits, whereas most mutual fund companies only report to 3 significant digits. My guess is that you only owned 89.0178 shares, but that the mutual fund company rounded it as 89.018. Just report the sale to match the brokerage 1099-B.

If you are still concerned and know the original purchase amount and cost/share on the date that you made the original purchase, you can verify this. Just divide the purchase amount by the share price at time of purchase and look at it to 4 significant digits. If this was a combination of purchases, it probably isn't worth doing the calculation.

mmicha wrote:Last year I transferred a bunch of funds to Vanguard Brokerage. I then sold them and received a 1099-B form from them. However, I have one fund that was sold that apparently has incomplete cost basis and I don't know how to address it. It doesn't seem to be the whole amount. I sold 89.0180 shares... However, the 0.0002 shares have a problem.

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: Cost Basis and 1099-B/Taxes

Post by sscritic » Sun Mar 02, 2014 12:27 pm

In other words, you got a bonus of 0.0002 shares without even asking! I wonder what I would buy with that extra 0.4 cents (the value at the sale price).

Note that when you buy or sell shares at Vanguard in dollar amounts, this same rounding occurs. Sometimes you even lose or gain a few pennies depending on the share price and the dollar amount.
Last edited by sscritic on Sun Mar 02, 2014 12:28 pm, edited 1 time in total.

Calm Man
Posts: 2917
Joined: Wed Sep 19, 2012 9:35 am

Re: Cost Basis and 1099-B/Taxes

Post by Calm Man » Sun Mar 02, 2014 12:28 pm

Date Sold: 4/1/2013
Fund: SUWIX (DWS Core Equity Institutional)
Shares: 00.002
Total Cost: blank
Proceeds: $0.00
Long Term Gains: blank
Total Gain/Loss: blank

OP, above is what you are questioning.
Before I tell you what I would do, the chance of any action from IRS regardless of what you do is as close to zero as you get. However, this is easy. Put in a date of various (unless you know the date). Use a Cost basis of................... ZERO.
Voila.

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