Financial Perspectives
Preparing for Tax Season
Recently passed legislation affects how financial firms report cost basis information to clients and the IRS. As the second phase of the cost basis regulation rolls out for 2012, now is a good time to review changes that occurred in 2011 and consider changes that will occur for the new year. Changes to 1099 reporting include:
Moving Into 2012
Regulated investment company (RIC) and dividend reinvestment plan (DRP) shares acquired on or after January 1, 2012, will be reported to the IRS. In addition, sales for S corporations will become subject to tax reporting on Form 1099-B. Raymond James defaults to first-in, first-out (FIFO) for all security types. The average cost accounting method will be available for eligible security types. Additional information: Visit raymondjames.com/costbasis.
Additional Reporting
Raymond James is now required to report more detailed cost basis information to the IRS on covered securities.
New Form 1099-B
The redesigned form will show cost basis and proceeds for equities that are covered by the legislation (those acquired on or after January 1, 2011) and that were sold or redeemed in 2011, plus whether the gain or loss is short or long term. Additional information: Visit raymondjames.com/taxreporting.
New this tax season, Raymond James will begin mailing tax statements on February 15, 2012, in line with IRS 1099 mailing guidelines. 1099s delayed due to specific holdings, late income reallocation or anticipated cost basis adjustments will be mailed by March 15, 2012. Please be aware that even after delaying 1099 mailings to account for these issues, amended 1099 statements can still occur. For added convenience, you’ll be able to view an online copy of your tax reports, along with statements for all of 2011, by accessing your account online through Raymond James Investor Access, accessible at raymondjames.com/investoraccess.
Asset allocation does not guarantee a profit nor protect against loss.
Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are wholly owned subsidiaries of Raymond James Financial, Inc. (NYSE-RJF).
The information contained in this newsletter has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. We may, from time to time, have a position in the securities mentioned and may buy or sell such securities in the course of regular business.