Discussion:Charitable Gift Annuity - brokerage reported stock sales to TP on 1099-B
From TaxAlmanac
| Revision as of 16:18, 29 March 2008 Kevinh5 (Talk | contribs) (You can't change) ← Previous diff |
Revision as of 17:48, 29 March 2008 OR Taxman (Talk | contribs) (Thanks, Kevin. I) Next diff → |
||
| Line 23: | Line 23: | ||
| You have to be ethical and do what is right according to what happened. You can't ignore the information you were provided - they were sold while in his account.}} | You have to be ethical and do what is right according to what happened. You can't ignore the information you were provided - they were sold while in his account.}} | ||
| + | |||
| + | {{ForumReplyPost|UserID=OR Taxman|Date=29 March 2008|Text=Thanks, Kevin. I'm not trying to be unethical here or change anyone's basis in their investment. I just don't know the answer and am exploring all the possibilities. I've been working under the assumption that the charity knew what they were doing here (without naming names -- this is an extremely large centuries-old international church organization). I assumed that the church has handled these transactions before, that the steps they took were the proper ones, and that the 1099-B reporting issues had been mishandled somewhere else. I'm getting closer to believing this may not be the case, but I'm not quite done looking. Sure does begin to smell like the charity messed up here in their actions, just seems so unlikely. I might end up punting to someone with specific expertise in this area if it looks like the charitable organization did mess this up.}} | ||
Revision as of 17:48, 29 March 2008
Discussion Forum Index --> Tax Questions --> Charitable Gift Annuity - brokerage reported stock sales to TP on 1099-B
| 5 March 2008 | |
| Client intended to transfer appreciated stock to charity in 2007 and establish charitable gift annuity. Client received 2007 1099-B from brokerage showing sales of these stocks. I'm thinking this reporting from the brokerage is not correct. My assumption is that the transfer of the stocks to the charity would not show up on a 1099-B to the taxpayer. Client did receive 1099-R from charity, with Box 7 code "F" and capital gains amount.
I'm checking with all the parties involved to see if I can get more details about the actual transaction but wanted to ask here if: 1) this sounds like an error on the part of the brokerage; 2) this could possibly be an error on the part of the client / charity in how they structured the transaction; 3) this is correct reporting and the 1099-B transactions should be handled in the client's 1040, related to the capital gains amount reported on the 1099-R? I think most of the transaction is correct but am concerned about this 1099-B from the brokerage. But maybe I'm misguided here... | |
| 29 March 2008 | |
| Here's the latest: Funds were not transferred to an account in the name/ID number of the charity. Charitable organization sent the brokerage a letter requesting redemption of the mutual funds and a check was sent to the organization. So that redemption triggered the 1099-B to taxpayer.
I have contacted the charitable organization, and they indicated they had intended to set this up so there was not a taxable event with regard to the mutual funds for the taxpayer. So I think I may be missing something on my end with respect to how to properly report the mutual fund transaction on the taxpayer's tax return. I'm thinking maybe report the sales with a basis in the amount of FMV so there is no gain on the taxpayer's Sch D with a statement explaining the contribution? But that doesn't seem correct. I'm still working on settling this issue if anyone has experience in this area, I still would value your input. Happy final 18 days all...counting 'em down! Hang in there everyone... | |
| 29 March 2008 | |
| You can't change basis just because the taxpayer "wanted" and the charity "wanted" it to be a non-taxable event.
You have to report it the way it happened, let the taxpayer pay the tax, and let him get angry with the charity for screwing this up. You have to be ethical and do what is right according to what happened. You can't ignore the information you were provided - they were sold while in his account. | |
| 29 March 2008 | |
| Thanks, Kevin. I'm not trying to be unethical here or change anyone's basis in their investment. I just don't know the answer and am exploring all the possibilities. I've been working under the assumption that the charity knew what they were doing here (without naming names -- this is an extremely large centuries-old international church organization). I assumed that the church has handled these transactions before, that the steps they took were the proper ones, and that the 1099-B reporting issues had been mishandled somewhere else. I'm getting closer to believing this may not be the case, but I'm not quite done looking. Sure does begin to smell like the charity messed up here in their actions, just seems so unlikely. I might end up punting to someone with specific expertise in this area if it looks like the charitable organization did mess this up. | |
