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Your Schedule D Solution 

What's New For Tax Year 2011 -

Form 8949 and the New Schedule D:

  For tax year 2011 the capital gain reporting requirements have changed considerably and this will affect traders significantly.

  The primary change for the taxpayer is that the IRS now requires a new document in place of the old Schedule D-1 pages.  This is the new Form 8949.  Additionally, the Schedule D format itself has changed such that it is essentially an entirely different reporting vehicle.

  The new Form 8949 is entirely different from the old Schedule D-1 format and in some cases taxpayers will have to file up to three separate Form 8949 documents.

 The reason for the change is to allow the IRS to better cross-check taxpayer reported capital gains and losses with brokerage reported figures.  Along with the taxpayer form changes, the brokerage 1099-B documents are also changed.  The brokerages begin reporting the cost basis to the IRS where formerly they only reported sale proceeds.  Additionally, the brokerages also report wash sale totals and the 1099 has a new design and new boxes to report these items.

  The net effect of these changes is that it will be considerably more difficult for most active traders to report capital gains and losses from trading activity.  The taxpayer reporting cannot be completed until the taxpayer has access to the 1099-B from the brokerage which is not required to issue until February 15th.  The reason that the taxpayer cannot prepare their reports earlier is because the taxpayer must use a separate Form 8949 for those items where the brokerage reported the cost basis and yet another for those items where the brokerage did not report the cost basis.  Additionally, the wash sale items must be coded and reported on the form and that total should cross-check against the broker reported total or the variance should be explained.

  The good news for our customers is that we have already changed our software and processing methods to accommodate the changes.  We can produce accurate, picture perfect Form 8949 documents which conform to the IRS requirements.

  We will still do this at a flat fixed fee, however, because items now must be cross-correlated and categorized against several more reported figures from the brokerage, in order for us to quote the price we will need to receive the 1099-B (or at least the figures therefrom) as well as a Realized Gain Loss Report from the brokerage.  After initial checking to make sure results will cross-check we will quote you our rate.  In most cases the rate should be between 19.95 and 49.95 depending upon the additional human intervention involved in completing the files.

  As always, we will strive to make the process as simple and as inexpensive as we can; and your satisfaction is guaranteed!



Have questions or need more information?

Feel free to  contact us for any additional information. We are always happy to answer your questions because we expect that once you speak with us, we will be adding a new client.  Our primary growth is by referral, and we would be delighted to add you to our list of satisfied customers.