My uncle has very low Social Security income, however he had $100 000 in stocks. All of the stocks were sold in 2006, does he owe anything to the IRS? Does he have to file his taxes? I sort of remember, that he only has to pay taxes fafter the gains. So, this means I have to find out what price he bought the stock and what price he sold it? and the difference is the gain that will be taxed? Please, anybody who knows the answer, help!
2007-04-02 07:40:13 · 6 answers · asked by melinda1351 1 in Business & Finance ➔ Taxes ➔ United States
Does Charles Schwab report to the IRS if the stokc are sold?
2007-04-02 08:29:45 · update #1
Make sure you have all of the initial costs of the stocks sold! That is called the basis.
I would recommend a tax professional! The brokerage firm has records of the price of stocks at the time of purchase. This is very important that you get this info.
Members of the National Association of Tax Professionals (NATP) assist taxpayers with tax preparation and planning. NATP is a nonprofit professional association founded in 1979 and provides professional education, tax research, and products to its members. NATP exists to serve professionals who work in all areas of tax practice and has more than 17,500 members nationwide. Members include individual tax preparers, enrolled agents, certified public accountants, accountants, attorneys and financial plan. They will give you a referral to someone in your area.
Regardless if how he comes out on the end, the sales have been reported to the IRS and that's all they know. Those stocks could have fallen from the sky for all they know, so yes, he must file.
good luck & bless
2007-04-02 07:49:14 · answer #1 · answered by Wood Smoke ~ Free2Bme! 6 · 1⤊ 0⤋
Taking your last question first, yes, Schwab or any other broker is required to report stock sales to the IRS.
And yes, unless he wants to pay capital gains taxes on the entire sales price, he'd need to find out what he bought them for and when, to calculate the true gain.
If he sold $100K in stocks in 2006, chances are that he'll owe some taxes on the sale, but that's not for sure, and depends on what his gain was on them. You won't be able to tell that until you gather all the info on the purchases.
2007-04-02 19:12:05 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
Sale of stock is reported to the taxpayer and the IRS using Form 1099B. Your uncle should file and report the sale on Schedule D.
Any gain would be subject to capital gains tax. If the gain is large enough, it may cause some of the Social Security to be taxed.
2007-04-02 16:02:54 · answer #3 · answered by ninasgramma 7 · 1⤊ 0⤋
Yes, he needs to file Federal taxes. Attached a Schedule D with the 1040 and find out the basis of each stock. His financial institution would know these information.
Good luck.
2007-04-02 15:50:39 · answer #4 · answered by Shayne 1 · 1⤊ 0⤋
You are absolutely correct. Capital gains taxes are due on the gain from the sales of the stocks. File that on Schedule D.
If the total gain plus 1/2 of his SS income is over $25,000 some of his SS will be taxable.
2007-04-02 15:10:47 · answer #5 · answered by Bostonian In MO 7 · 2⤊ 1⤋
Yes, he owes money to the IRS, assuming his stocks were not in a regular account. It sounds like he has a lot of capital gains.
If that is the case he should get his records on purchases and sales handy and get TurboTax to work it out.
2007-04-02 14:49:15 · answer #6 · answered by Anonymous · 0⤊ 1⤋