Charles Schwab took over my account this year from Ameritrade. My 1099B stock cost basis are wrong and I have corrected them but I would like to add an explanation so I don't get a letter from the IRS. How do I do this?
You can print and mail your return and attach a letter of explanation. It is not uncommon for the cost basis reported on the Form 1099-B to need adjustment though, so I'm not sure the letter of explanation is necessary. If you got a notice from the IRS, you would need to send a similar letter and that should resolve the issue.
Thanks for the info. I forgot to say that I also had to change the date acquired (it was 24 yrs ago). Do you think that will be a problem for the IRS?
Thanks in advance.
If the change in date is still for a period that is longer than one year, it would not affect anything as the captial gain or loss would retain the same character as being a long term capital gain or loss. Therefore, even though the date has been corrected, it does not affect any of your tax calculations on your return.
Please see this link for more information on capital gains and losses.