Request for Question Clarification by
vercingatorix-ga
on
28 Mar 2005 08:39 PST
I've run into this problem myself. Here's what you do:
First, understand the 1099 is the responsibility of the brokerage, not
you. I won't comment on whether the brokerage fulfilled its legal
responsibility because I don't know. More to the point, it's
irrelevant to this discussion.
Regardless of whether the brokerage has actually sent you everything
it should, you can use your own records for tax purposes. To be
honest, in the past I've found brokerage 1099 forms to be far less
useful than simple trade confirmations. All you need to take care of
this is a printout of the purchase and the liquidation confirmations.
If your brokerage allows you to print out buy and sell confirmations
from their Web sites (these days, most do that), get online. I'm
assuming you possess a copy of the buy confirmation. The next step is
to go through the account history and find out how the brokerage
accounted for the sale or removal of the securities from the account.
There is more than one way for the brokerage to report the incident.
Some charge a flat fee for removing stocks. Sometimes the stock still
has value, but not enough to offset the trading costs. That happened
to me, and the brokerage sold the stock and charged me a fee equal to
the value of the holdings (about $4). Regardless of the vocabulary and
accounting used, you should be able to find the transaction on your
account history.
Print out the account history and circle the transaction and the date,
and file away the history. If you can obtain a printout of a
confirmation of the sale or deletion, all the better.
If you'd like an additional layer of paperwork, call the brokerage
account and ask them to send you a copy of the buy and sell
confirmations. They may charge you for that. But if you aren't
satisfied with what you print from the Web site or gather from your
own records, pay the fee and get the forms.
Please keep in mind that while the feds require the brokerage to send
you a 1099, they do not require you to use only that 1099 to justify
your numbers.
It's not your responsibility to force the brokerage to send you
anything beyond what they normally send. Just keep your own accurate,
detailed records, and you have met your legal obligation. That's not
to say that an irritable IRS agent won't give you a hard time at an
audit. Someimes that happens, even when the deductions are legitimate.
But legally, you're on good ground as long as you can demonstrate when
you purchased the stock and when the stock was removed from your
account, along with the prices of the securities at both times.
V
