‘Laconia Daily Sun’ Speaks In ‘Tongues’ Again, Creating Wrong Impression. Sounds Like The Police Got ‘Paid’!
..by Anura Guruge
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IRS Form 8949: Should Be On An Exception Basis, And Not Rote. Would Save Billions In Processing Costs And Untold Hours For Taxpayers.
..by Anura Guruge
I assume that less than 30% of folks who file actually have to include 8949s. So, I appreciate that this is not a widespread concern and that of those that do have to file 8949s, 90% use a paid tax professional who gladly undertakes the drudgery for a ‘small’ price.
I also do NOT have a problem with having to report exact and accurate ‘cost basis’ (and ‘yes’ as a ‘product‘ of the “dot.com” stock craze I still have enough capital loss carryover to last me another 70 years)! I actually prefer when ALL of the cost basis is reported to the IRS. That way I don’t have to do any thinking or go digging through statements trying to work it.
I have two issues. Lets deal with the easier one first. Financial institutions should REPORT all cost basis as they know them. So, lets not have a category saying ‘NOT reported to the IRS’. Yes, I fully understand that financial institutes cannot always do this because they are NOT aware of the cost basis — an easy example is if you transfer stock from one broker to another and then sell that transferred stock. The second broker has no record of when you bought the stock and how much you paid for it. In such cases they report: ‘basis unknown’. That is fine.
Now the crux of my suggestion. In the cases where the basis HAS BEEN reported to the IRS.
So, this is what we have.
>> The IRS has an itemized list of all the transactions with a bottom line that adds it all up.
>> You have the same list with the same bottom line.
>> You now reproduce this list in 8949 and send it to the IRS.
>> IRS checks the list that you sent with the list they got.
That is redundant and pointless.
So, sticking with the assets for which basis is reported, what 8949 should have at the top is:
A] Do you agree with the reported costs basis and final tally: YES NO.
….If NO list all exceptions.
That way folks like me, who always agree, don’t have to reproduce the whole list. The IRS does not have to compare my list with what they already have. That will save processing. That will save costs.
Think about it.