New IRS Instructions Should Alleviate Tax Preparer Panic CLARIFICATION | AccountingWEB

New IRS Instructions Should Alleviate Tax Preparer Panic CLARIFICATION

The revised paragraph in the 2005 Schedule D Instructions have caused a significant amount of confusion. Regrettably, AccountingWEB may have added to that confusion with an article published briefly here on Wednesday, implying that the reporting requirements for Schedule D and D-1 have changed. They have not.

Investors and traders are required to provide all of the information related to transactions resulting in capital gains or losses including a description of property, date

Advertisement

acquired, date sold, sales price, cost/other basis and gain/loss. The revision of the instruction paragraph did not change this requirement. In fact, the Internal Revenue Service (IRS) intended the revision to remind taxpayers and preparers that ALL the information was required for all transactions.

The revised paragraph reads “You must enter the details of each transaction on a separate line. If you have more than five transactions to report on line 1 or line 8, report the additional transactions on Schedule D-1. Use as many Schedules D-1 as you need. Enter on Schedule D, lines 2 and 9, the combined totals from all your Schedules D-1. Do not enter “see attached” or summary totals from an attachment in lieu of reporting the details of each transaction directly on Schedule D or D-1.”

Transaction summaries are NOT acceptable. Neither is writing “details available upon request” on Schedule D. Statements prepared by brokerages are acceptable in lieu of Schedule D ONLY when they contain ALL the required information in a similar format.

More information on Schedule D can be found online at www.irs.gov/formspubs/article/0,,id=109875,00.html the clarification is the third item on the list.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

WHAT KIND OF FIRM ARE YOU?
As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.