1099 B from Vanguard Question

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SevenBridgesRoad
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1099 B from Vanguard Question

Post by SevenBridgesRoad »

I need help understanding my 1099 B from Vanguard please.

Box 1d matches my records precisely and includes both matured CDs and stocks sold. I had $160,000 of CDs mature, purchased at issue date for $160,000 (not secondary market).

But…box 1e on the 1099 doesn't include the purchase price (cost) of $160,000 of CDs that matured in 2019. Why? The detailed supporting statement behind the 1099 shows line-by-line box 1e transactions, including (accurately) the CDs cost basis. But the 1099 box 1e excludes the 160K CDs basis.

It seems like if box 1d includes the CDs proceeds at maturity, why wouldn’t box 1e include purchase price (my cost basis)? How does the IRS know what my capital gains actually were ($8,036.10) and not $160K more?
Last edited by SevenBridgesRoad on Wed Feb 19, 2020 12:35 am, edited 1 time in total.
Flora
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Re: 1099 B Question

Post by Flora »

How many years ago did you invest in the CDs? Maybe they are 'noncovered' and basis was not required to be reported to you or to the IRS on the 1099B.
Topic Author
SevenBridgesRoad
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Re: 1099 B Question

Post by SevenBridgesRoad »

Flora wrote: Tue Feb 18, 2020 11:41 pm How many years ago did you invest in the CDs? Maybe they are 'noncovered' and basis was not required to be reported to you or to the IRS on the 1099B.
These were purchased in 2018.
kaneohe
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Re: 1099 B from Vanguard Question

Post by kaneohe »

wondering why a CD would be on a 1099B.............the CD pays interest , not capital gains. Since the 1099B appears to show the proceeds of sale as including principal plus gains, if the basis showed principal the difference between the 2 would be capital gains.

I have muni bonds show up on 1099B at maturity. However, the interest is shown separately as interest and the cost basis and proceeds at maturity are the same (bonds bought at offering, not on secondary market).
Topic Author
SevenBridgesRoad
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Re: 1099 B from Vanguard Question

Post by SevenBridgesRoad »

kaneohe wrote: Wed Feb 19, 2020 11:53 am wondering why a CD would be on a 1099B.............the CD pays interest , not capital gains. Since the 1099B appears to show the proceeds of sale as including principal plus gains, if the basis showed principal the difference between the 2 would be capital gains.

I have muni bonds show up on 1099B at maturity. However, the interest is shown separately as interest and the cost basis and proceeds at maturity are the same (bonds bought at offering, not on secondary market).
The interest from the CDs shows up in the 1099-INT section. Then, the CD principal amounts show up in box 1d but not box 1e. Called Vanguard and the rep basically said they did it correctly. (I have no reason to think otherwise.) In the detailed report (not the 1099 B), the CDs are listed under these words, "Short term transactions for which basis is not reported to the IRS --Report on Form 8949, Part 1, with Box B checked."

I'm sure my tax preparer will know how this works, but I since we have so many Bogleheads doing their own taxes, I thought this might have a quick, easy explanation which might educate not only me but others also.
kaneohe
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Re: 1099 B from Vanguard Question

Post by kaneohe »

seems crazy they would do it this way since they know the basis.........but since they are not reporting it to IRS,
I would just make the basis whatever they report as gross proceeds so that there is no net CG.

I assume the interest reporting is correct?

did you say they are reporting the proceeds as principal plus interest? Maybe that's why they are not reporting basis.......if they reported basis you would have a CG in addition to your interest. They should have reported the proceeds as principal only.
Topic Author
SevenBridgesRoad
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Re: 1099 B from Vanguard Question

Post by SevenBridgesRoad »

kaneohe wrote: Wed Feb 19, 2020 1:26 pm seems crazy they would do it this way since they know the basis.........but since they are not reporting it to IRS,
I would just make the basis whatever they report as gross proceeds so that there is no net CG.

I assume the interest reporting is correct?

did you say they are reporting the proceeds as principal plus interest? Maybe that's why they are not reporting basis.......if they reported basis you would have a CG in addition to your interest. They should have reported the proceeds as principal only.
The interest reported is correct.

Proceeds (box 1d) is reported principal only.
Katietsu
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Re: 1099 B from Vanguard Question

Post by Katietsu »

I have had the same thing happen. As previously stated, you just report the cost basis as the same as the proceeds. No problem. I have a guess as to the why but i have never cared enough to confirm.
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