It is true that all stock sales for 2005 were omitted from my 2005 taxes. Someone else did my taxes as I was too young and inexperienced to do them myself. The forms the IRS sent me are not clear about what they want me to submit to them to clear up the omitted stock sales.
Do I need to submit a schedule D? A 1099 form from my online broker? Should I pay the penalty fee just in case so interest doesn't add up while the case is being handled?
2007-01-11 06:38:53 · 5 answers · asked by rrr ttt 1 in Business & Finance ➔ Taxes ➔ United States
Paying the penalty will only stop future interest on the penalty. The 1099-B doesn't have to be sent in by you. It was already sent by the broker and that is what triggered the letter to you.
If you paid to have your taxes done, go back to that preparer. Any good preparer will fix this at little or no charge, as long as you had told them about the stock sales. If you didn't tell them, then you will have to pay the cost of fixing this or do it yourself.
You must file 1040X Amended Return. Be sure to attach Schedule D to the 1040X. You have to mail it in. Do this immediately. If the 1040X shows tax due, pay what you can.
The letter you received may show more taxes due than are actually due, since the IRS does not know the purchase price of the stocks. They only know the proceeds from the sale and are computing taxes on all of the proceeds.
Hopefully you have gains and losses and little or no tax due.
2007-01-11 06:51:44 · answer #1 · answered by ninasgramma 7 · 1⤊ 0⤋
You need to first of all fill out a Sch D. You need the price each stock sold for and date of sale and for the basis you need the date of purchase and what you paid for the stock. The difference amounts of gain and loss are combined and give you the amount (total) of loss or gain that you report on your tax return. When you have the final number on your Sch D you can fill out a 1040X. If you racked up a loss you will have a refund coming back to you. If you had a profit you will have to pay; but that's life. Do the math and do the 1040X; you might be surprised and happy to get a refund.
2007-01-11 07:07:14 · answer #2 · answered by acmeraven 7 · 0⤊ 1⤋
If you received a notice from the IRS questioning your 2005 return and listing the items that were omitted, read the entire notice carefully - it will give you instructions on how to proceed. The notice would list items that were reported to the IRS, but that you didn't report on your return. The notice from them probably says that you should NOT file a 1040X amended return. It probably says that if you agree with the notice, here's what you owe, and that if you disagree with the return, tells you how to respond.
Even if you agree with the items that they say were omitted, check their tax calculations. I've seen at least one of these notices where the items listed were correct, but their calculation of additional taxes owed was way off.
2007-01-11 14:52:33 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
File an amended tax return. You need to complete 1040X showing why you are amending the return, and include the amended 1040 with all necessary forms, such as Schedule D for the stock sales.
2007-01-11 06:46:09 · answer #4 · answered by jseah114 6 · 1⤊ 0⤋
expensive W: Your brokerage fact will element all of your buys and sells so that you do not have the liberty to p.c.. and chosen. you should have a purchase for each promote till you short a inventory. definite you're ideal they are all couple of minutes period. lengthy time period is any element over a million 12 months. also save in recommendations in case you re-purchase with in 30 days of a loss the wash sale regulations kick in. this suggestion changed into depending on the tax regulation in result on the time it changed into written because it applies to the information that you provide. click on my profile to study better. Errol Quinn Enrolled Agent
2016-12-02 03:24:13 · answer #5 · answered by marconi 4 · 0⤊ 0⤋