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IRS form 8949 - Tax Forms - 1099 and W2 IRS Tax Forms | Buy Tax Forms

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IRS form 8949

The IRS has released a new tax form that serves the purpose of reporting capital gains and losses from stocks, bonds, mutual funds, and anything else that falls into the category. This form was introduced during the 2011 tax year and all investment related transactions are to be reported on the new 8949 form also known as Sales and Other Dispositions of Capital Assets. You can find the PDF version of the form on the IRS website along with the instructions that tell you how to fill it out.

During the 2008 year, Congress put in place the Emergency Economic Stabilization Act. This act is what made it mandatory for all brokers to report the cost of investing their products to investors to the IRS. The IRS made these changes under the theory that if they have brokers report their costs they will be able to reduce the amount of time that individual tax payers have to take when it comes to keeping up with their records on their investments which benefits everyone when it comes to the tax reporting process in general.

By taking this route the brokerage firms are the ones who are held responsible for sending out the 1099 b form which is to report the sale of investment products such as stocks. Prior to the act the 1099 B form only included information about the sale of the investment such as the date. However, tax payers were then responsible for reporting any of the other needed information on Schedule D. Most of the brokers were already aware of the supplemental information as it was used in their annual reports. So, in 2011 the cost basis information would be included in the brokers report. However, the broker is not always responsible for reporting the cost basic information it just depends on the type of investment. Brokers now carry the responsibility of making sure they provide the cost basics for all stocks and any other investment products.

Form 1099 –B has been revised to make sure it covers the cost basic reporting needed. Not to mention the fact that additionally the IRS has also revised Schedule D and resulted in creating the new IRS form 8949. Schedule D now serves the function of providing a summary of all of the capital gains transactions. Not to mention the fact that IRS form 8949 allows the individual investment sales to provide more information. All of the investment sales are going to be in one of the following categories:

  • Sale of covered securities
  • Sales of non-covered securities
  • Sale  of investment assets

When you look at the new 8949 form you will be able to see all of the following categories. Not to mention the fact that there is a separate 8949 form available for the different transactions. Furthermore, the form contains two pages with short term transactions being the first page and long term transactions being the second page. More specifically, the first page of the form is where you will provide all information related to capital funds. Additionally, there is also a separate 8949 form that allows you to report the capital funds with the cost basics.

Even though the purpose of this new form is to make it easier for tax payers to report certain types of information the fact still remains that brokers are never going to be taking on the entire process by themselves. This is because this new way of reporting does not apply to the old shares it only covers those stocks that were purchased in 2011 and beyond.

 

 
 
 
 

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