New Security Cost Basis Reporting
Financial Institutions
January 01, 2011
by
Bryan Meddings
On October 12, 2010, the Internal Revenue Service (IRS) issued final
regulations on the reporting of sales of securities and their related
cost basis. The final regulations reflect rules established under the
Energy Improvement and Extension Act of 2008 (the “Act”,) which
require reporting of customers’ adjusted basis in sold securities,
classification of gains or losses as long-term or short-term, and allow taxpayers to compute the basis of certain stock by averaging. The
regulations impact brokers and custodians at make sales or transfer
securities on behalf of customers, issuers of securities, and
taxpayers who purchase or sell securities.
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Length: 2 pages (PDF 91 kB)