Vanguard corrected 1099B is now incorrect

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Pete12
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Vanguard corrected 1099B is now incorrect

Post by Pete12 » Mon Mar 06, 2017 8:46 pm

Vanguard sent me a corrected 1099B today for my brokerage account, but the corrected version is now incorrect! The original version was correct.

I sold some lots of Total International Index Admiral on 11/23/16 using specific ID cost basis method as part of a TLH (first time doing this and I was practicing!)

My trade confirmation shows specific ID and if I look at the settings on the account, all the funds show specific ID as they always have. The original 1099B correctly reflected this transaction and a loss of $500 was shown. I thought all was well and good.

The corrected 1099B that arrived today had different cost basis figures, the loss shown was now $200. Upon investigating the difference it appears they recalculated the 1099B using the FIFO cost basis method. If I view the realized gains and losses tab for 2016 on my brokerage account online it now states FIFO! I have never used FIFO on any of the funds in this account.

I have sent a secure message to Vanguard and will post here on what they say. From googling the forum I see they have had cost basis issues in the past, but I haven't seen one where everything was processed correctly at the time of the transaction but then the corrected 1099B later on was wrong! Anyone else had a similar issue this tax reporting season?

kiddoc
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Re: Vanguard corrected 1099B is now incorrect

Post by kiddoc » Mon Mar 06, 2017 9:31 pm

Do you have any email confirmations/ statements from that time showing the method of accounting you chose? I have found Vanguard reps realize their system's stupidity better if you make them read out their own confirmation and then show how the system actually did something else. In the long run, if you want to Tax-loss harvest, move away from Vanguard.
"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

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Pete12
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Re: Vanguard corrected 1099B is now incorrect

Post by Pete12 » Mon Mar 06, 2017 10:08 pm

kiddoc wrote:Do you have any email confirmations/ statements from that time showing the method of accounting you chose? I have found Vanguard reps realize their system's stupidity better if you make them read out their own confirmation and then show how the system actually did something else. In the long run, if you want to Tax-loss harvest, move away from Vanguard.

Yes I have the paper trail, hopefully can be fixed without too much fuss. So annoying though, it's hardly rocket science to get this stuff right. Makes you wonder how many mistakes go unnoticed on accounts much larger and complex than mine!

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Pete12
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Re: Vanguard corrected 1099B is now incorrect

Post by Pete12 » Tue Mar 07, 2017 10:27 am

Doing some more digging on this while I'm waiting to hear back from Vanguard. Looking at the lots I still own of Total International Index, Vanguard is now showing I still own lots that were clearly sold and that show up as sold on my trade confirmation!

So this seems to be more than just a tax reporting issue, the whole recordkeeping is incorrect. Very disappointing...

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Doc
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Re: Vanguard corrected 1099B is now incorrect

Post by Doc » Tue Mar 07, 2017 5:44 pm

Pete12 wrote: Upon investigating the difference it appears they recalculated the 1099B using the FIFO cost basis method. If I view the realized gains and losses tab for 2016 on my brokerage account online it now states FIFO! I have never used FIFO on any of the funds in this account.

It is not unheard of for a broker to revert to FIFO when their IT department screws up. The FIFO calculations are easy. Don't even need a computer. :annoyed

Several years ago I got Vg to correct a similar error which they were happy to do. However, I wound up with a 1000 share lot with zero cost. I had to liquidate the entire position and start over.
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HueyLD
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Re: Vanguard corrected 1099B is now incorrect

Post by HueyLD » Tue Mar 07, 2017 6:04 pm

Pete12 wrote:Doing some more digging on this while I'm waiting to hear back from Vanguard. Looking at the lots I still own of Total International Index, Vanguard is now showing I still own lots that were clearly sold and that show up as sold on my trade confirmation!

So this seems to be more than just a tax reporting issue, the whole recordkeeping is incorrect. Very disappointing...

This is a real OMG moment. Hard to believe!!!!!!

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Pete12
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Re: Vanguard corrected 1099B is now incorrect

Post by Pete12 » Thu Mar 09, 2017 12:16 pm

Heard back from Vanguard last night, they have escalated the issue to the resolution department- requested I give them until first week of April for a reply.

Then this morning I got an email stating that my "brokerage transaction confirmation is available." Logged on and it looks like my transaction history, realized gain/loss position, and current positions are correct and back to normal. Also a "Brokerage cost basis lot detail update" appeared which shows the correct lots sold in November. 1099B is still incorrect however.

Not sure if my account has been touched by human hands yet or if the system somehow corrected itself... will continue to post updates.

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Re: Vanguard corrected 1099B is now incorrect

Post by Lord Snow » Thu Mar 09, 2017 3:30 pm

Yikes! I knew that Charles Schwab always messes up the 1099B calculations, so you have to do cost basis by hand yourself. But I never imagined I'd have to watch out at Vanguard, too.

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Pete12
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Re: Vanguard corrected 1099B is now incorrect

Post by Pete12 » Thu Mar 09, 2017 4:18 pm

Lord Snow wrote:Yikes! I knew that Charles Schwab always messes up the 1099B calculations, so you have to do cost basis by hand yourself. But I never imagined I'd have to watch out at Vanguard, too.

I have read here that Vanguard has had cost basis issues for a lot of folks who transitioned from their mutual funds only platform to their brokerage platform. However I am a relative newcomer and have only ever been on the brokerage platform at Vanguard. That's why I was so surprised that happened.

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Re: Vanguard corrected 1099B is now incorrect

Post by Doc » Thu Mar 09, 2017 5:33 pm

Lord Snow wrote:Yikes! I knew that Charles Schwab always messes up the 1099B calculations, so you have to do cost basis by hand yourself. But I never imagined I'd have to watch out at Vanguard, too.

We have had accounts at both for almost 20 years. Our experience is just the opposite.
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Pete12
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Re: Vanguard corrected 1099B is now incorrect

Post by Pete12 » Wed Mar 15, 2017 9:50 am

Finally received the 2nd corrected 1099B from Vanguard which now matches exactly back to the original one! So it looks like we are all good now.

To be honest I was expecting much more of a hassle with Vanguard to get this resolved, but in the end it just took one email to them and it was taken care of. So while I'm still a bit irked that the error happened in the first place, I'm glad it was an easy fix.

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GreatOdinsRaven
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Re: Vanguard corrected 1099B is now incorrect

Post by GreatOdinsRaven » Wed Mar 15, 2017 2:06 pm

Pete12 wrote:Finally received the 2nd corrected 1099B from Vanguard which now matches exactly back to the original one! So it looks like we are all good now.

To be honest I was expecting much more of a hassle with Vanguard to get this resolved, but in the end it just took one email to them and it was taken care of. So while I'm still a bit irked that the error happened in the first place, I'm glad it was an easy fix.


Congratulations. I sold to TLH in January (SpecID). A couple of weeks later got a letter from Vanguard saying they converted it to FIFO. Called them. They told me that they'd call me back on 3/7/17 to let me know it was fixed. They still haven't called me or fixed it (3/15/17). Sent them a secure email two days requesting follow up. Haven't heard back, yet.
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Re: Vanguard corrected 1099B is now incorrect

Post by alvinsch » Wed Mar 15, 2017 7:08 pm

In January 2016, their system "lost" the tax basis on one of my holdings which I let them know. Come February my 1099B was wrong for trades on that holding as they reverted to FIFO. I kept badgering them monthly and got several updated 1099B, all wrong. Finally in September they admitted their current software was incapable of handling the problem and they had no idea when it would be fixed. I never did receive a correct 1099B and now I'm transferring some of my account over to Schwab.

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Re: Vanguard corrected 1099B is now incorrect

Post by Doc » Mon Mar 20, 2017 12:15 pm

Pete12 wrote:Finally received the 2nd corrected 1099B from Vanguard which now matches exactly back to the original one! So it looks like we are all good now.

Just got our second correction this AM by snail mail. Corrected date is 03/10/2017. Copy available for download is dated 03/13/17 on web site but it is the earlier date when you actually see the download.

Now the question becomes is there a new TXF file or do we just import it again into tax software and hope for the best?

Edit: They uncorrected the first correction. :P
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Re: Vanguard corrected 1099B is now incorrect

Post by plumberboy » Tue Mar 21, 2017 9:13 am

I also received a corrected 1099b from Vanguard and it was exactly like the original I had received earlier. I am puzzled.

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Re: Vanguard corrected 1099B is now incorrect

Post by Doc » Wed Apr 05, 2017 6:46 am

Just got email from Schwab with a heads up on a correction to the first correction. Should receive paper within 1 week for US, 2 weeks for overseas. Extension anyone? :annoyed

Last time the download was not available for several days after the heads up IIRC.
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BL
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Re: Vanguard corrected 1099B is now incorrect

Post by BL » Wed Apr 05, 2017 6:59 am

Are all of these problems in the new "brokerage" accounts, not the "old-fashioned" regular mutual fund accounts that many of us still have?

I have never had a problem with 1099s from our non-brokerage accounts, although they are usually just the annual dividends and possibly CGs from funds.

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Doc
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Re: Vanguard corrected 1099B is now incorrect

Post by Doc » Wed Apr 05, 2017 8:16 am

BL wrote:Are all of these problems in the new "brokerage" accounts, not the "old-fashioned" regular mutual fund accounts that many of us still have?

I have never had a problem with 1099s from our non-brokerage accounts, although they are usually just the annual dividends and possibly CGs from funds.

Brokerage: I think both Vanguard's and Schwab's corrections are a result of the TIPS reporting requirements that came into effect on 1/1/2016. Even with the extra delay (two years more than nominals) the brokers were still unprepared. The negative yields on short TIPS also may not have been anticipated.

There are some IRR algorithms that don't work with negative yilelds. Excel's IRR function couldn't handle negative IRRs at least a few years ago. (I haven't looked recently.)
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Re: Vanguard corrected 1099B is now incorrect

Post by Doc » Sat Apr 15, 2017 1:42 pm

Doc wrote:Just got email from Schwab with a heads up on a correction to the first correction. Should receive paper within 1 week for US, 2 weeks for overseas. Extension anyone? :annoyed

Last time the download was not available for several days after the heads up IIRC.


I was really PO'd at Schwab for sending out a correction (#2) for which I get a head's up email 'til around April 5th.

I just got another heads up on 4/15/17. The correction is dated April 7.

Same old same, same old inability for the Brokers to do the reporting requirements for TIPS.

Schwab is not alone in the pack. FWIW Vanguards reported adjusted cost for a year old (covered) TIPS issue, jumped by some 2% in the last two weeks which is equivalent to a 50% inflation rate. Sure glad I bought TIPS and not nominals. Arrgh!

Both Schwab and Vanguard are having problems with exactly the same security. I bought it at auction at both brokers so I count use one to check the other. NOT. Vanguard has not picked up the same "error". Maybe one of their IT guys has a Schwab account and we'll get another Vanguard 1099 correction in a couple of weeks.
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AARRGGHH

Post by Doc » Mon Apr 24, 2017 12:14 pm

Just got number 4 correction from Schwab.

Vanguard 2 vs. Schwab 4
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Re: AARRGGHH

Post by Pete12 » Mon Apr 24, 2017 9:22 pm

Doc wrote:Just got number 4 correction from Schwab.

Vanguard 2 vs. Schwab 4

Surely this has to be a record!!

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