stock sale capital gain calculation on 1099 form brockage firm

[davoti2]

Hi, 

I would appreciate some help.

I bought X shares of XYZ on 01/05/2024 and sold X shares of XYA a few days later with a little gain. During  this time, I still have large amount of XYZ shares in my portfolio which I help for many years.

On 1099 from the brockage firm, when calculating capital gain, it picked X shares from years ago which had a much lower price, this resulted in large capital gain, though LT gains. 

What I meant is to use the buy/sell pair within the days in Jan/2024 to calculate my gain.

Can brockage firm correct this after the order is completed and settled?  If not, I can change cost base myself when filing tax? (even though the cost base is reported to IRS on 1099 from the firm?)

Thanks

Dav

[Mike9241]

in part this may depend on what method the broker had you registered for if securities were sold. they may have you down for First-In, First, Out.  In order to use a different method for any sale you would have to contact them before the sale to identify the lots you are selling. You need to contact them to discuss this matter.

just changing the cost on your schedule D/form 8949 might not work. the IRS will notice the mismatch (they get a copy of the 1099-B), recompute your taxes and send you a bill. if after 4/15, then there will also be penalties and interest.

there is code B for the form 8949 to use if the wrong tax basis is reported, but if you failed the follow the rules, the correct tax basis was reported. 

[davoti2]

Thanks for the reply.

Yeah, the brockage firm (C.Shwab) put FIFO as default, I was not paying attention when doing transaction, only to notice on 1099 form. 

Can brockage firm adjust this base retroactively at this  (late) time? 

Thanks

[Mike9241]

you need to talk to brokerage firm exec or its tax department. 

[davoti2]

"there is code B for the form 8949 to use if the wrong tax basis is reported, but if you failed the follow the rules, the correct tax basis was reported. "

Thanks again, not sure I understand this, do you mean I manually enter the cost base (using LIFO method)? can you elaborate?

Thanks