Incorrect cost basis on Fidelity tax statements

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Gadget
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Incorrect cost basis on Fidelity tax statements

Post by Gadget » Sat Feb 10, 2018 9:51 pm

Last year I sold a bunch of stock for 6714.67 short term losses and 11293.62 long term losses at Fidelity. I kept track of the numbers as I sold them. But on my tax statement for last year, all the stock has a cost basis of 0. So they claim I have tons of gains.

Both of the sales claim that the basis for the transactions are not reported to the IRS.

What does this mean other than Fidelity's record keeping sucks? Can I just claim the losses on my taxes? What do I need to document? Do I need to call Fidelity to straighten things out?

livesoft
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Re: Incorrect cost basis on Fidelity tax statements

Post by livesoft » Sat Feb 10, 2018 9:55 pm

You don't need to do anything with Fidelity. Since they didn't report the cost basis, you can report it. The IRS will assume you are being truthful, so have it. There is nothing you send to the IRS to document it, but keep your records of proof with your tax return in case you get audited down the road.
Last edited by livesoft on Sat Feb 10, 2018 9:56 pm, edited 1 time in total.
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stlutz
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Re: Incorrect cost basis on Fidelity tax statements

Post by stlutz » Sat Feb 10, 2018 9:56 pm

Send them a secure message describing the issue and they'll look into it.

I had a problem a couple years back. Here was my experience: viewtopic.php?t=187025

Chip
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Re: Incorrect cost basis on Fidelity tax statements

Post by Chip » Sun Feb 11, 2018 8:36 am

It seems like there must be some sort of problem at Fido if the OP has short term losses on a stock with no basis information available since brokers have been required to track that on purchases made since 2011.

pshonore
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Re: Incorrect cost basis on Fidelity tax statements

Post by pshonore » Sun Feb 11, 2018 9:21 am

Chip wrote:
Sun Feb 11, 2018 8:36 am
It seems like there must be some sort of problem at Fido if the OP has short term losses on a stock with no basis information available since brokers have been required to track that on purchases made since 2011.
Some stocks are still not covered, for example MLPs which report tax info on a K1 and have unusual basis adjustments.

Chip
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Re: Incorrect cost basis on Fidelity tax statements

Post by Chip » Sun Feb 11, 2018 10:43 am

pshonore wrote:
Sun Feb 11, 2018 9:21 am
Some stocks are still not covered, for example MLPs which report tax info on a K1 and have unusual basis adjustments.
Thanks. I'd forgotten about MLPs. But they're not really stocks, are they? They're partnerships that trade like stocks. Of course that may be what the OP owns/owned and he/she isn't aware of the exception to the basis reporting rules.

Gadget
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Re: Incorrect cost basis on Fidelity tax statements

Post by Gadget » Wed Feb 14, 2018 9:21 am

As far as I know, they are all regular company stock with a regular ticker. I think the issue is that the company plan transfered from e-trade to fidelity. When it went to fidelity, they didn't bother getting cost basis information from e-trade.

I went back to old e-trade documents for the long term losses and figured out the cost basis for each yearly vested lot. I wouldn't want to explain it in an audit, but I think I have enough papers to prove my cost basis numbers and losses if needed. Using old Brokerage statements and lining up with vested date years on the new Brokerage.

I still need to call fidelity for the short term losses and ask why that also has a cost basis of zero. And those losses weren't transferred from e-trade.

Thanks for the help everyone.

JW-Retired
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Re: Incorrect cost basis on Fidelity tax statements

Post by JW-Retired » Wed Feb 14, 2018 10:16 am

Gadget wrote:
Wed Feb 14, 2018 9:21 am
As far as I know, they are all regular company stock with a regular ticker. I think the issue is that the company plan transfered from e-trade to fidelity. When it went to fidelity, they didn't bother getting cost basis information from e-trade.

I went back to old e-trade documents for the long term losses and figured out the cost basis for each yearly vested lot. I wouldn't want to explain it in an audit, but I think I have enough papers to prove my cost basis numbers and losses if needed. Using old Brokerage statements and lining up with vested date years on the new Brokerage.
FWIW, some years back I moved stocks from several other brokerages to Fidelity and the cost basis for all the stocks got lost in the process. I did have records of what the cost basis was from the old brokerage statements. Once I noticed the cost basis had vanished (several years later) Fido allowed me to simply add it into their system online as cost basis with an asterisk as "owner supplied" data. That made no difference at all in how Fido made use of it later. Not long ago I gifted some these stocks to my children and Fido sent the cost basis along with it.

I assume they would still do this?
JW
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Longdog
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Re: Incorrect cost basis on Fidelity tax statements

Post by Longdog » Wed Feb 14, 2018 10:34 am

pshonore wrote:
Sun Feb 11, 2018 9:21 am
Chip wrote:
Sun Feb 11, 2018 8:36 am
It seems like there must be some sort of problem at Fido if the OP has short term losses on a stock with no basis information available since brokers have been required to track that on purchases made since 2011.
Some stocks are still not covered, for example MLPs which report tax info on a K1 and have unusual basis adjustments.
As well as stocks that are acquired through RSU vestings; at least in my case they are uncovered.
Steve

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tfb
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Re: Incorrect cost basis on Fidelity tax statements

Post by tfb » Wed Feb 14, 2018 10:36 am

Gadget wrote:
Wed Feb 14, 2018 9:21 am
I still need to call fidelity for the short term losses and ask why that also has a cost basis of zero. And those losses weren't transferred from e-trade.
You should've said you didn't buy these shares with cash from your brokerage account. The shares vested from an employer stock plan are required by the IRS to show as uncovered with a cost basis of zero. I sold shares from employer grants at E*Trade. They also show a cost basis of zero on the 1099-B. You are supposed to put in the cost basis yourself on your tax return using the amount included on your W-2.
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Gadget
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Re: Incorrect cost basis on Fidelity tax statements

Post by Gadget » Wed Feb 14, 2018 10:37 am

Longdog wrote:
Wed Feb 14, 2018 10:34 am
pshonore wrote:
Sun Feb 11, 2018 9:21 am
Chip wrote:
Sun Feb 11, 2018 8:36 am
It seems like there must be some sort of problem at Fido if the OP has short term losses on a stock with no basis information available since brokers have been required to track that on purchases made since 2011.
Some stocks are still not covered, for example MLPs which report tax info on a K1 and have unusual basis adjustments.
As well as stocks that are acquired through RSU vestings; at least in my case they are uncovered.
These are all RSU vestings. I did not know that, but I guess that makes sense given what is happening.

Dudley
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Re: Incorrect cost basis on Fidelity tax statements

Post by Dudley » Wed Feb 14, 2018 10:49 am

Just put the correct basis in you tax return, don't waste time trying to get broker to fix it.
At those amounts I would think very slim chance its going to trigger IRS question, even less chance of an audit.

libralibra
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Re: Incorrect cost basis on Fidelity tax statements

Post by libralibra » Wed Feb 14, 2018 2:03 pm

tfb wrote:
Wed Feb 14, 2018 10:36 am
Gadget wrote:
Wed Feb 14, 2018 9:21 am
I still need to call fidelity for the short term losses and ask why that also has a cost basis of zero. And those losses weren't transferred from e-trade.
You should've said you didn't buy these shares with cash from your brokerage account. The shares vested from an employer stock plan are required by the IRS to show as uncovered with a cost basis of zero. I sold shares from employer grants at E*Trade. They also show a cost basis of zero on the 1099-B. You are supposed to put in the cost basis yourself on your tax return using the amount included on your W-2.
Not sure about this. Maybe it's an ETrade thing? With my company ML account, RSU basis is always shown correctly (i.e. equal to date of vesting). For stock options, if you do a same-day sale, then the basis on the 1099 is always wrong (at least, ever since the rules changed in 2015 or so) - they use the unadjusted basis so you need to adjust it based on the disqualifying income that was added to your W2. Once you do that, your 8949 pretty much just shows a small capital loss (equal to the commission and fees you were charged for the sale-day sale). If you forget to do that, then you are effectively double-taxed on your option gains!

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