1. CAPITAL GAIN OR LOSS
PUB 4012
TAB d
Pages D-36 to D-43

2. SALE OF ASSETS ---SCHEDULE D
Key elements of sale
When was it bought?
When was it sold?
What is the sale price?
What is the cost basis?
Adjustments to basis?
Should receive form 1099 B from investment company/brokerage house

3. BROKER STATEMENT

4. BROKER REQUIREMENTS AS OF 2011
Broker must report whether a gain or loss is short term or long term on Form 1099-B unless the securities sold were non-covered securities
Broker must report cost or other basis on Form 1099-B unless securities sold were non-covered securities

5. NON-COVERED SECURITIES
A security other than stock
Stock purchased before 2011
Stock acquired before 2012 in a regulated investment company for which the average basis method is available
Stock acquired before 2012 in connection with a dividend reinvestment plan

6. SALE OF PROPERTY Holding Period---Short term or long term Gain or loss
Short term is one year or less
Gain or loss
Sale price minus Cost basis
Six possible situations for
Short term and basis reported =‘A’
Short term and basis not reported =‘B’
Short term and no 1099 B provided =‘C’
Long term and basis reported =‘D’
Long term and basis not reported =‘E’
Long term and no 1099 B provided =‘F’

7. SALE OF PROPERTY PROCEDURES
To enter into TaxSlayer, select “Income” on top, then select “Capital Gain and Losses (Schedule D)”, then select “Capital Gains and Loss Items”

8. CAPITAL GAIN AND LOSS
Select this

9. CAPITAL GAIN AND LOSS (SCHEDULE D)
Select this

10. SALE OF PROPERTY PROCEDURES
To enter into TaxSlayer, select “Income” on top, then select “Capital Gain and Losses (Schedule D)”, then select “Capital Gains and Loss Items”
Enter Brokerage Name in “Description of Property”
Enter “Date Acquired” from 1099 B
Enter “Date Sold” from 1099 B
Enter “Sales Price” from 1099 B

11. CAPITAL GAIN AND LOSS ITEMS
Brokerage name
Date Acquired
Date Sold
Sale Price

12. SALE OF PROPERTY Select “Cost Basis Type” (from 1099-B Line 3)
To enter into TaxSlayer, select “Income” on top, then select “Capital Gain and Losses (Schedule D)”, then select “Capital Gains and Loss Items”
Enter Brokerage Name in “Description of Property”
Enter “Date Acquired” from 1099 B
Enter “Date Sold” from 1099 B
Enter “Sales Price” from 1099 B
Select “Cost Basis Type” (from 1099-B Line 3)
Basis reported
Basis not reported
1099 B not provided
Enter “Cost”

13. COST BASIS OF PROPERTY Basis of stock Adjusted Basis
In order to compute gain or loss on a sale, tax payers must provide their basis in the property sold. The basis of property is usually its cost.
Adjusted Basis
An adjustment to basis may include additional commissions or fees paid to the broker at the time of purchase or sale.
Events after the purchase of stock (such as SPLITS, REVERSE SPLITS or STOCK DIVIDENDS)
Require adjustments (decreases or increases) to the per share basis of stock.

14. COST BASIS OF PROPERTY Property Received as a Gift
Determination of the Basis is OOS
Reinvested stock dividends, DRIPS and Mutual fund shares
Require adjustments (generally increases) to the basis of the original investment
If taxpayers cannot provide their basis in an investment, the IRS will deem it to be zero.

15. CAPITAL GAIN AND LOSS ITEMS
Cost basis type
Cost

16. SALE OF PROPERTY Enter any adjustment as needed
To enter into TaxSlayer, select “Income” on top, then select “Capital Gain and Losses (Schedule D)”, then select “Capital Gains and Loss Items”
Enter Brokerage Name in “Description of Property”
Enter “Date Acquired” from 1099 B
Enter “Date Sold” from 1099 B
Enter “Sales Price” from 1099 B
Select “Cost Basis Type” (from 1099-B Line 3)
Basis reported
Basis not reported
1099 B not provided
Enter “Cost”
Enter any adjustment as needed
Wash sales, main home exclusion, reported cost basis adjustments, etc. (D-39 and 40)

17. CAPITAL GAIN AND LOSS ITEMS
Adjustment amount
Adjustment type

18. SALE OF PROPERTY
To enter into TaxSlayer, select “Income” on top, then select “Capital Gain and Losses (Schedule D)”, then select “Capital Gains and Loss Items”
Enter Brokerage Name in “Description of Property”
Enter “Date Acquired” from 1099 B
Enter “Date Sold” from 1099 B
Enter “Sales Price” from 1099 B
Select “Cost Basis Type” (from 1099-B Line 3)
Basis reported
Basis not reported
1099 B not provided
Enter “Cost”
Enter any adjustment as needed
Wash sales, main home exclusion, reported cost basis adjustments, etc. (D-39 and 40)
Click “Continue” if finished or “Save and enter another” if more entries to input

19. SPECIAL SITUATIONS Stock Purchased at Various Times
Instead of Entering all dates individually, Check box “Alternate option” under “Date Acquired” and select from dropdown menu
Various – Short term
Various – Long term

20. STOCK PURCHASED AT VARIOUS TIMES
Check here
Select here

21. SPECIAL SITUATIONS Brokerage Statement with Multiple Entries
Stock Purchased at Various Times
Instead of Entering all dates individually, Check box “Alternate option” under “Date Acquired” and select from dropdown menu
Various – Short term
Various – Long term
Brokerage Statement with Multiple Entries

22. BROKERAGE STATEMENT WITH MULTIPLE ENTRIES
Allowed to group entries together
Total for each of 4 categories (should be grouped on statement already)
Short term and basis reported
Short term and basis not reported
Long term and basis reported
Long term and basis not reported
Enter “Code M” after broker’s name in “Description of Property”
Enter Date Acquired, Date Sold, Sale Price, Cost Basis
In “Adjustment”, use Adjustment code ‘O’ and “$0” adjustment
Send IRS the 1099B for entries with no reported cost basis
See Page D-38 for instructions

23. SPECIAL SITUATIONS Inherited Property Stock Purchased at Various Times
Instead of Entering all dates individually, Check box “Alternate option” under “Date Acquired” and select from dropdown menu
Various – Short term
Various – Long term
Brokerage Statement with Multiple Entries
Inherited Property

24. INHERITED PROPERTY -- DATE
Decedent died prior to/after 2010
Considered long-term no matter how long property actually held
In Taxslayer, Check box “Alternate option” under “Date Acquired” and select from dropdown menu “Inherited”
Decedent died in 2010
Out-of-scope unless representative or trustee provides cost basis, holding period and gain or loss.

25. INHERITED PROPERTY -- BASIS
Decedent died prior to/after 2010
Basis is generally considered FMV at time of death
Decedent died in 2010
Out-of-scope unless taxpayer has written documentation showing basis, holding period and gain or loss

26. SPECIAL SITUATIONS Sale of Main Home Stock Purchased at Various Times
Instead of Entering all dates individually, Check box “Alternate option” under “Date Acquired” and select from dropdown menu
Various – Short term
Various – Long term
Brokerage Statement with Multiple Entries
Inherited Property
Sale of Main Home

27. Sale of Main Home Main Home
Ownership and use tests
May be nontraditional home
Taxslayer has a “Sale of Main Home Worksheet” in the Capital Gain or Loss section
Figures Gain or Loss
Amount Realized (on sale)
Determines (Cost) Basis
Maximum Exclusion
Use Pub 17 or 4012 pages D41-43 if you have questions

28. CAPITAL LOSS CARRYOVER
Check last year’s return for carryover loss
If there is, then input into Taxslayer in the “Other Capital Gains Data” section
Short term loss carryover
Long term loss carryover

29. How Do You Handle the Situation
An elderly client comes in with a 1099-B. All your questions---when purchased, cost basis, were the dividends reinvested, etc ----are either answered by “my late husband bought them” or blank stares.
What’s your next step?

30. How Do You Handle the Situation---Answer
Ask if any papers at home
Have client (or you) call broker to get some info
Ask if any adult children to help gather info
Other suggestions??
But first, determine the impact of the sale without having a cost basis ---if no significant impact, why the hassle?