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.

You may like these other stories...

Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
Some of your clients may get away to business conventions from time to time. It gives them a chance to rub shoulders with colleagues, catch up on the latest developments, and fine-tune their skills. And, when the meetings or...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.