Specific Tax Lot Question

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xrw1
Posts: 71
Joined: Wed Aug 22, 2012 5:24 pm

Specific Tax Lot Question

Post by xrw1 » Mon Sep 29, 2014 1:35 pm

Good afternoon everyone,

I contribute monthly to my taxable account (Taxable account started in 2013) and I was reading into tax loss harvesting to get better educated in it.

My question revolves more around filing taxes for the specific tax lots. Lets say over the years I generated 50 different specific tax lots and I sold 30 of the lots for tax loss harvesting. When I file my taxes, would I have to list out all 30 specific lots IDs individually (ID, number of shares and cost basis) in my 1040 or would the 1099B that is provided to me contain that information.


Thank you in advance

livesoft
Posts: 62716
Joined: Thu Mar 01, 2007 8:00 pm

Re: Specific Tax Lot Question

Post by livesoft » Mon Sep 29, 2014 1:48 pm

Who knows what the tax laws will be when you get to that point? If you use software like TurboTax, you won't have to do much except download the 1099B from your financial institution and TT will put all the numbers on the proper lines on the tax forms. You will just need to review to see that the numbers got copied over. It really is that easy.

In the past, one could put on the tax forms all 30 lots on one line with "Date Acquired" as "Various". One would still need one line per date sold. And transactions have to be divided up so that the Long-Term ones go in one place and the Short-term ones go in another place. One might still be able to do that, but it doesn't matter because the tax software will take care of it for you.
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kaneohe
Posts: 5028
Joined: Mon Sep 22, 2008 12:38 pm

Re: Specific Tax Lot Question

Post by kaneohe » Mon Sep 29, 2014 5:36 pm

see lines 1a and 8a of sch D http://www.irs.gov/pub/irs-pdf/f1040sd.pdf

You can aggregate transactions. From form 8949 (and Sch D)
Quote:
Note. You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was
reported to the IRS and for which no adjustments or codes are required. Enter the total directly on
Schedule D, line 1a; you are not required to report these transactions on Form 8949 (see instructions).

Note. You may aggregate all long-term transactions reported on Form(s) 1099-B showing basis was reported
to the IRS and for which no adjustments or codes are required. Enter the total directly on Schedule D, line 8a;
you are not required to report these transactions on Form 8949 (see instructions).
As long as the basis was reported, one entry each for short and long term is sufficient.

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

Re: Specific Tax Lot Question

Post by Calm Man » Mon Sep 29, 2014 5:46 pm

Wow. This is a remarkable positive development. Particularly for shares acquired after the rules went into effect for custodians to forever keep cost basis information. I think it was beginning in 2012 for mutual funds. To think that if somebody has all securities or funds purchased after the rules went into effect, that somebody could make 100 sales and have it aggregated in one number for cost basis and one number for proceeds is truly wonderful. I don't sell things often or rebalance or tax loss harvest or all of those good things partly because of tax reporting. This removes that excuse...

kaneohe
Posts: 5028
Joined: Mon Sep 22, 2008 12:38 pm

Re: Specific Tax Lot Question

Post by kaneohe » Mon Sep 29, 2014 6:12 pm

Calm Man wrote:Wow. This is a remarkable positive development. Particularly for shares acquired after the rules went into effect for custodians to forever keep cost basis information. I .
for everybody.........simplifies our lives and IRS gets their fair cut. In retrospect, you have to wonder why the old system went on for so long..........................

Grasshopper
Posts: 906
Joined: Sat Oct 09, 2010 3:52 pm

Re: Specific Tax Lot Question

Post by Grasshopper » Mon Sep 29, 2014 7:25 pm

I have been taking LTCG for about 4 years, and taking some cash off the table and reinvesting a big chunk. So right now all my sells are reported to the IRS. I let Vanguard and TurboTax do all the heavy lifting. :beer

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