What kind of penalty will there be? Or will I be audited because of it?
2007-02-12 05:43:10 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
there are two options available to you. 1. file an amended return, the preferable option. 2. wait for about 1 1/2 years until you get a letter from the IRS saying that you owe them taxes plus interest on the amount on the 1099B. At that point you will have to send them a letter with documentation showing your cost of the stock you sold plus an explanation of why you did not report the amount on your Sched D and then they will send you another letter stating the amount you owe plus interest. Normally there is no penalty, just interest.
Note: the first letter you receive from them will tell you that you owe taxes on the full amount of the sale. That is because they do not know the cost of the shares, so they assume that you paid nothing.
2007-02-12 05:52:54 · answer #1 · answered by Anonymous · 0⤊ 0⤋
File an amended return, form 1040X. If you do it on or before April 17, there won't be any penalty. And no, you won't be audited because of it, but if you don't file the amended return, eventually you'll get a bill from the IRS for additional taxes plus interest and possible penalties.
2007-02-13 00:44:14 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Simply file an amended return to correct the situation. Form 1040X on www.irs.gov will take care of everything.
2007-02-12 13:48:25 · answer #3 · answered by Anonymous · 2⤊ 0⤋