Early this 2011 filing tax season we posted a rather long, eye glazing, article about the new tax Form 8949. As we have delved deeper into tax season we wanted to update an important fact regarding this tax form.
Form 8949 has a check box at the top of “A, B or C.” Here are a few pointers to help make this form easier:
- Box A, relates only to basis reported on your 1099’s and should be marked for most, if not all short-term capital gains basis, as the government was notified of the basis on this information.
- Box B, relates to basis not reported to the IRS and captured from our systems and should be marked on a totally new form generated for long-term capital gains as we/JK Financial have kept track of the basis, but this information was not reported directly to the IRS. (Client Turbo Tax users: Carefully check “A cost basis was provided on my statement” and then select “This cost basis was not reported to the IRS” and you should be in good shape)
- Box C will most likely have no activity or associated transactions.
The key information item to remember is any basis reported on your 1099’s from our vendor will be associated with Box A and all other basis reported directly from our JK Financial systems will be reconciled on Box B.
Again, we are not CPA’s and are just now beginning to see the respective tax software issues, but feel if you keep this “A, B, C” issue in mind, it will be helpful in your tax filing and reviews.
Have a Great Day!