How do I report this 1099-DIV from my mutual fund?
Enter the ordinary dividends from Form 1099-DIV (PDF),
box 1a, on line 9a of Form 1040 (PDF), U.S.
Individual Income Tax Return. Enter any qualified dividends from Form
1099-DIV, box 1b, on line 9b of Form 1040. If you have an amount entered in
other boxes of your 1099-DIV refer to Form 1040, Schedule D Instructions to
see where to report them. If your only capital gains and losses are from capital
gain distributions, refer to Form 1040 Instructions.
How do I figure the cost basis when the stocks I'm selling were
purchased at various times and at different prices?
If you can identify which shares of stock you sold, your basis is what
you paid for the shares sold (plus sales commissions). If you sell a block
of the same kind of stock, you can report all the shares sold at the same
time as one sale, writing VARIOUS in the "date acquired"
column of Form 1040, Schedule D (PDF). However,
what you enter into the "cost or other basis" column is the total of all the
acquisition costs of the shares sold.
If you cannot adequately identify the shares you sold and you bought the
shares at various times for different prices, the basis of the stock sold
is the basis of the shares you acquired first (first-in first-out). Except
for certain mutual fund shares, you cannot use the average price per share
to figure gain or loss on the sale of stock.
For more information, refer to Publication 550, Investment Income
and Expenses.
Should I advise the IRS why amounts reported on Form 1099-B do not
agree with my Schedule D for proceeds from short sales of stock not closed
by the end of year?
If you are able to defer the reporting of gain or loss until the year the
short sale closes, you will need to attach a statement to your Form 1040, Schedule D (PDF) explaining the details of your short sale and that
it has not closed as of the end of the year. This will allow you to reconcile
your Form 1099-B (PDF) to your Form 1040, Schedule D (PDF) and still not recognize the gain or loss from the
short sale. Include your name as it appears on the return and your social
security number.
For more on these rules and the rules for put options and wash sales refer
to Chapter 4 of Publication 550, Investment Income and Expenses.
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