Superseding return for small investment losses?

Forum|Forum|4 years ago
February 25, 2022
3 replies
27 views

We filed our taxes, we've also received our return $ already. BUT I realized I forgot to report some very small losses (under $100) between covered and un-covered transactions on some investments.

It sounds like I need to file a superseded return now since it's before the actual tax deadline.

Should I bother doing this since I didn't make any money? Also, do I have to re-file the entire return and just label it as "superseded"...and also mail it? It sounds like I have to send by mail if I were to supersed the return.

LudwigVan_fan

Alumni - Champ

First, if you file a "corrected" return, it would be with the cover Form 1040X. TT can do 1040X for preparation. Instructions for filling out a F1040X can be found here. Using commercial software such as TT, 1040X can be filed now electronically.

https://www.irs.gov/instructions/i1040x

Yes, you may have attach a "corrected" 1040 along with the 1040X

I'm assuming your losses are capital losses. Capital losses generally offset any capital gains first. If the capital losses exceed capital gains, then they can be applied against ordinary income. However these losses are limited per year to $3,000 on a joint return, or $1,500 on married filing separate.

If you don't claim the losses in the year in which they were realized, then you can not claim them in any other year. So, if had investment losses in 2021, you must claim them in that year.

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**

LeonardS

Level 14

Yes, you may file a superseding tax return. A superseding return is defined as a second (or subsequent) return filed on or before the due date for filing, including extensions. In contrast, an amended return is one filed after an original return and after the due date, including extensions. A superseding tax return must be paper-filed. You will make the changes to the original return print out a copy and write “Superseded” on the top of the return and then mail your return to the IRS.

It is your decision if you should bother filing a superseding tax return as @LudwigVan_fan stated "...if you had investment losses in 2021, you must claim them in that year".

This link Where To Mail Federal IRS Tax Returns? will provide you with the IRS address when you click on your state.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

LudwigVan_fan

Alumni - Champ

Some people do file another 1040 and write Superseding Return on the top There is a risk that it might be flagged as a duplicate return.

I would still recommend filing 1040X and filing it before the due date + extensions. That should then be treated as a superseding return.

21.6.7.4.10 (10-01-2021)

Superseding Returns

The due date of a calendar year individual income tax return is generally April 15th. A fiscal year individual income tax return is generally due the fifteenth day of the fourth month following the close of the fiscal year. If the due date falls on a weekend or holiday, the return is due on the next business day. Under Notice 2020-23, the due date of a 2019 calendar year individual income tax return is postponed to July 15th, 2020. Under Notice 2021-21, the due date of a 2020 calendar year individual income tax return is postponed to May 17, 2021. For more information on Statute consideration, please refer to IRM 21.5.3.4.3, Tax Decrease and Statute Consideration.
1. An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date is a superseding return.
2. Correspondence postmarked on or before the due date or extended due date, requesting changes to tax returns, is processed as superseding information.
Consider the following when making a superseding adjustment:
- Changes in irrevocable elections (e.g., Section 179, Joint to Separate)
  
  Note:
  
  A return filed after the original due date but on or before the extended due date does not constitute a superseding return in this situation.
- Manual computation of ES Penalty. Refer to IRM 20.1.3, Estimated Tax Penalties.
- Reversal of offsets to other Individual Master File (IMF), Business Master File (BMF), and Debtor Master File (DMF) accounts when increasing the balance due
- Returns meeting Examination criteria. Follow procedures in Exhibit 21.5.3-2, Examination Criteria (CAT-A) - General.
- Reversal of the offset to the Treasury Offset Program, refer to IRM 21.4.6.5.7.1, Allowable TOP Offset Reversals.
- Use the appropriate non-refile blocking series (e.g., 05, 77, 99, etc). Refer to IRM 21.5.1.5.3, CIS Source Documentation, and Document 6209 - Section 4 - Adjustment Blocking Series, for additional information.
- Use item reference number 871 when necessary. Refer to IRM 20.1.2.2.6.2, Incorrect Tax Shown Recorded, and IRM 20.1.2.2.6.3,Wrong Return Posted First, for additional information.

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**