The Emergency Economic Stabilization Act of 2008 requires Broker-Dealers to track and report cost basis to the IRS for all covered securities (equities) after January 1, 2011. The new cost basis reporting requirements will impact client reporting, transfers of assets and gifting of shares.
Investors will continue to be required to report capital gains and losses on Schedule D based on all holdings across all accounts that have the same taxpayer identification. 1099B Changes
There will be no changes to the 2010 Form 1099B received in early 2011. The 1099B received in early 2012 for tax year 2011 will report any gain or loss on the sale of a covered security regardless of whether it is short-term or long-term. Transactions in non-covered securities will not be reported to the IRS.
Please refer to the following IRS link for a draft of the 1099B that becomes effective in 2011:
http://www.irs.gov/pub/irs-dft/f1099b--dft.pdf
Trade Confirmations:
If a client does not provide specific instructions to dispose of a security using a specific method, the sale will default to FIFO (First in/First out) and no versus purchase information will appear on the confirmation. For specific share instructions, details will display on the confirmation when they are known at the time of the trade.
For specific share instructions provided by the client after the trade date (and prior to the settlement date), correspondents will need to email the request to:
service@whitepacific.com.
Please call White Pacific at 888-882-8856 or 415-901 0322 if you have any questions.
