Mom died almost 2 years ago. She had a financial advisor that put her into products of his company. I had never heard of them before. Last summer, I liquidated the account and moved the funds into our account (they had already changed the name to mine, so it was pretty easy).
However, the 1099B lists every fund that was in her plan, and there a dozens of them (the 1099B is 40 pages). The question is, do I have to report each and every fund, or can I just use the summary they provided with the 1099B? The summary states the sum of long term and short term gains separately, including the basis and everything. I know I can put dates as “various”, but can I do that with the investment? Or, perhaps, just name the company that compiled the funds into their product that they sold?
UPDATE: The software I’m using allowed me to enter a summary, so apparently that is allowed. So that’s what I did. Short term gains as one entry, long term as another. I was dreading having to enter 40 pages of 1099B.
Most software these days (Turbotax and H&R Block) let you download the info from the brokerage account and enter it electronically into your tax return. Yes, each transaction must be listed separately and verified for accuracy before submission.
I’m using CashApp. It’s free, and seems to do a good job. It doesn’t seem to have a download option, however.
I went back to the entry, and clicking on the “summarized entry” bit, it said this (so apparently it is a legit approach):
Summarized entry
If your Form 1099-B or similar statement has a lot of stock sales you can choose to enter a summary of your total brokerage transactions for each similar investment type instead of entering each sale one at a time. Make sure you check for all sections and enter the totals for each section accurately (short or long-term and whether or not the basis was reported to the IRS). You can usually find the section headers above each section on your Form 1099-B or similar statement. If you have questions about how to read your statement, please contact the issuer directly.
If your statement indicates the brokerage company has reported your basis to the IRS you’ll usually want to enter the cost basis exactly how it’s reported on your statement. If you’re aware of any differences you may want to discuss those with your brokerage company before entering them here.
Keep in mind, if you didn’t receive Form 1099-B or similar summary statement or if you need to make additional adjustments you may also need to mail a summary statement to the IRS even if you e-file your return. It’s very important you enter each section correctly so that the form(s) required by the IRS are completed accurately.
Example: If your stock statement shows detailed information with the same IRS reporting for 100 short-term stock sales and 150 long-term stock sales you could make one entry for the short-term sales and another for the long-term sales. Making 2 stock sale entries is much faster than entering 250 items as long as you enter all of the summarized information correctly.
NOTE: Entry mistakes can result in an adjustment notice from the IRS. Please keep in mind the IRS may also need a summary statement from you if you choose to summarize your entries. If you have questions about how to enter your summary transactions or how to group them together it may be a good idea to consult your tax advisor before completing your tax return.
You are allowed to summarize your transactions. It’s usually easiest to summarize transactions by broker, so you can match to a 1099-B. You may need to mail in documentation supporting that summary, even if you e-file. Mailing in a copy of your Form 8949 plus a copy of the detail that your broker issues to you in support of the 1099-B should be sufficient. Your tax software should let you know if you need to mail anything in.
Do keep in mind that not only do you need to separate between long-term and short-term, you also need to separate between sales where the basis was reported to the IRS and sales where the basis wasn’t reported to the IRS. So, you may have to enter 4 different summary numbers for each broker.