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..by Anura Guruge
If you use Quicken (which I refuse to do, because I really don’t see why it needs to know my inside leg measurements, what statin I take for my cholesterol and the make of car I drive), I gather that Fidelity (for one) will provide downloadable 8949 data that will get automatically filled in. Well, even that will not convince me to use Quicken (though I did use it, a decade ago, when I was honing my tax preparation skills). That Fidelity does not provide us with this data in Excel (comma separated data) form is inexcusable and I did complain about it this year. I assume that there must be other financial institutes that are gracious enough to provide this data in Excel form to their clients.
So what I do is create my own Excel using the PDF (or HTML) of the tax statements available online with Fidelity.
I will copy all the columns and then do a PASTE SPECIAL (Text) into a Word document. I will then use the global replace function of Word to add tabs. Then I do a Text –> Table conversion. Then I delete the columns I don’t want. I then copy the entries of this table to a new Excel spreadsheet — again doing a PASTE SPECIAL (Text).
Then, just because I enjoy messing around with Excel, I subtotals of all the transactions to make sure Fidelity got them correct! Having the subtotal also serves as a ‘check sum’ to make sure I that I haven’t lost any transactions.
Then I fire up Free Fillable Forms (FFF) and create a new Form 8949. I can then copy across a complete row, from Excel to FFF and then paste it.
So, if you notice I haven’t typed in any of the transactional data per se. All of it is essentially copy, paste …. copy, paste.
I can do this fairly quickly. That I have two monitors which enables me to keep the Excel on the left-hand side monitor and FFF on my (main) right-hand side monitor definitely helps.
Hope this helps. Enjoy.
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.