2011 tax form changes for stock trades etc.

http://www.usatoday.com/money/perfi/tax ... 53061388/1

Anyone noticed the new tax forms for Stock traders? Makes me glad I stopped doing that years ago, except in a Roth IRA.

New form 8949 in addition to Schedule D. I like the idea of the cost basis reporting, its confusing though the way it is phased in and creates more forms and complexity, not less. Good ol IRS! Invent another form to file!

Investors who think the new forms will make filing taxes easier are in for a surprise, too. It's still up to investors to monitor the cost basis, for instance, of any stock bought prior to Jan. 1, 2011. Due to the new tax requirements, taxpayers also are required to fill out a new form called the 8949, which might be more detailed than investors were expecting. Not only must investors break down sales by lots, but they must also choose from three options to tell the IRS how the brokerage tracks the transaction.

Additionally, investors must mathematically reconcile any discrepancy between what they report as cost basis and what the broker reported...

Why do things have to be so complicated?

FredHayek wrote: Why do things have to be so complicated?

When has anything in the government not been complicated and polluted with bureaucratic BS?

Beginning with the just-completed 2011 tax year, it's up to brokers to track how much investors paid for stocks that were sold and report that information directly to the IRS. This so-called cost basis is what determines how much tax investors pay.

Maybe you guys can help me with this. Here's what I don't understand with the brokerage report (this might be a stupid question so take it easy on me - I'll be speaking my tax lady later this week)

Suppose I buy 1000 shares of stock X for $10 a share. Later I buy another 1000 shares at $15 a share.
At the end of the year I sell 1000 shares of stock X at $20 a share. What shares are identified as the ones that were sold? The 1000 at $10 or the 1000 at $15? How would a brokerage firm determine this?

Omni- When I used to do it on Sch. D, It was up to the investor to identify the shares that were sold. I always cleared out the whole position to make life easier.

With the new reporting, who knows? It could be first in first out, or an average. Good luck. I'm done with the trading and complexity of it all. Best advice, put it in a Roth IRA and avoid the headaches.

Disclaimer- I am not a tax expert, no guarantees.

Yep Joe, that's the way it always was. In that situation I would decide based on my other gains and loses during the year. Now, I have no idea how or why a brokerage firm can make that call.

I guess I'll wait and see what my tax folks say later this week.

With Schwab it is FIFO by default. I can call them when I sell and designate a different block of shares.

FredHayek wrote: Why do things have to be so complicated?

tax accountant/attorney full employment act........

for most folks, FIFO (First In, First Out)....