1099b question--?

Question

do not know a thing about this so i am going to ask this again with more info

--back in june of 2005 i opened up an ameritrade acount with 1400
--and in august i closed my account and took out all the funds 1167
so i lost around 230
--when i did my taxs for that yr i figured i lost money so i am not going to deal with it so i didnt say anything about stock on my return

so 2day i got a bill from the IRS saying i owe 290
i already asked why do i owe money if i lost and ppl said the irs only say i sold stock the do not know when i bought it or how much i bought it for so this bil is understandab;e because they do not the whole story they see the 2nd half and nothing more so what do i need to do now what forms do i need to fill out what order do i do it can i attach it to my 06 returns or is this 2 completly different sets of paperwork??

do i need to do the scedual 9 do i need to do any forms attached to the sched 9 do i fill out a 2005 scedual 9 or this yrs??
do i have to amend an

do i have to amend this
will i get a return or will i have to pay
what forms do i need and what order do i do it
can i do this my self or do i need to hire someone -- i usually do my taxs on my own for yrs now and this is the first time this has ever happened to me

thanks for the help guys

Answer 1

Meg gives a brilliant answer. The only thing I would add is that the 1040X can be confusing to fill in if you have never done one before. The amendment itself seems pretty simple so I suggest taking it to a CPA or Enrolled Agent. Meg's estimate of costs is spot on in my experience. This, by the way, is not a job for H & R Block.

Answer 2

Okay, let me see if I understand what your question pertains to okay?..
.In June 2005 you opened up an Ameritraade account
In August 2005 you closed the account and withdrew the funds left in it?
If this scenario is correct, you essentially bought stocks through Ameritrade for 1,400 in June 2005. When you cashed out in August, you sold those same stocks but received a sale price on them of $1,167.

Ameritrade as your Broker (hence the 1099-B) reported your sale of stocks to the IRS. All the IRS received was the date of sale and total sale price for the stocks. They know nothing else; long or short term, purchase date, purchase price, etc. this information was up to you to provide when you did your 2005 tax return.

Since you did not include a Schedule D for stock sales on the originally filed return you got a CP2000 letter (I'm guessing) from the IRS stating an "under reporting of income for that year". Yes?

To correct this, fill out a 1040X Amended tax return for 2005. On the amended you first put the amounts, line by stated line, from your originally filed return....then in column two put the amounts from the corrected 2005 tax return (with a Schedule D) showing the sale date, sale price, purchase date and purchase price of the stocks you had and then sold in 2005. From what you've described, you've got a short term loss of $233. In column 3 of the 1040X you will show the differences in column 1 vs. column 2.
If you are having difficulty with this form, seek a qualified tax professional in your area. The cost for an Amended 1040X with a Schedule D (one item) should run you around $125 to $175 depending on the preparer.

For more information on "doing it yourself" search the irs.gov website under amended returns.

I hope that this has been of some help to you and good luck!