Proposed IRS Cost Basis Tax Reporting RegulationsSeptember 2010
As part of the Emergency Economic Stabilization Act of 2008, Fiduciary Trust is required to begin reporting cost basis information to the Internal Revenue Service on 2011 year-end Federal tax forms. Although this change will not impact your 2010 tax reporting and the IRS has not yet finalized its requirements, we are taking this opportunity to update you on the information available.
OVERVIEW OF THE PROPOSED IRS TAX REPORTING REGULATIONS
For securities sold through Fiduciary Trust accounts where we are required to issue IRS Form 1099-B, we will need to report additional information beginning with the 2011 tax year. Proposed regulations would require Fiduciary Trust to include the following information on Form 1099-B:
- Cost or other basis
- Reported gain or loss
- Whether the sale represented a short-term or long-term capital gain or loss
- Whether the security was “covered”
“Covered” refers to securities that are subject to the IRS’s proposed 1099-B cost basis reporting requirements (see timeline below)
- If applicable, wash sales loss disallowed
Wash sales occur when shares of a security are sold at a loss and shares of the same security are repurchased within the 61-day period, beginning 30 days before and ending 30 days after the sale
THE TIMELINE FOR IMPLEMENTATION
The IRS will phase in application of these proposed regulations, based upon the type of security:
- 2011-Corporate stock acquired after December 31, 2010
- 2012-Regulated Investment Companies (e.g., mutual funds) and Dividend Reinvestment Plans (“DRPs”) acquired after December 31, 2011
- 2013-All other specified securities, including bonds and options acquired after December 31, 2012
Fiduciary Trust is committed to making implementation of this proposed IRS regulation as easy as possible for you. As the IRS continues to finalize these new reporting requirements, we will keep you informed.
Fiduciary Trust's new capabilities brochure provides you with a comprehesive overview of our breadth and depth of wealth management services, our investment management philosophy and approach, and our firm's history and heritage.
Please complete the form below, and we will be happy to mail you a copy.