1099-B and Form 8949

Forum|Forum|3 years ago
April 4, 2023
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I sold a mutual fund in 2022 (with JP Morgan). Their 1099-B included cost basis for shares acquired in recent time (from 2012) but not for older shares (I believe this is due to the fund being with Washinton Mutual before JP Morgan took over). The form says "Report on Form 8949, Code X**-Either Part I or Part II with Box B or Box E checked". I do have old records and know what the basis was. Do I just ignore JP's form and enter the Proceed and Basis myself? Because I have no idea how to report on Form 8949 as suggested.

I also noticed that the basis for shares that were acquired in 2021 (short term capital gain) is less than what I paid to acquire those shares. I have no idea how JP Morgan determines the Basis. Can I make correction in Turbo Tax ? Thank you.

Best answer by HelenC12

Yes, you can make corrections and report the correct cost and proceed amounts in TurboTax. Make sure you keep the documents on how you arrived at the entered cost and proceed amounts.

Yes, you can ignore JP Morgan's Form 8949. TurboTax will generate Form 8949 when you enter your 1099-B forms.

Please see Do I need to fill out or mail in Form 8949?

Additional information: Where do I enter or import a 1099-B?

HelenC12Answer

Level 15

Yes, you can make corrections and report the correct cost and proceed amounts in TurboTax. Make sure you keep the documents on how you arrived at the entered cost and proceed amounts.

Yes, you can ignore JP Morgan's Form 8949. TurboTax will generate Form 8949 when you enter your 1099-B forms.

Please see Do I need to fill out or mail in Form 8949?

Additional information: Where do I enter or import a 1099-B?

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LuongPNguyenAuthor

Level 2

HelenC12,

Thank you for your help.

For those old shares JP Morgan named it as "Unknown Term Gains or Losses". Since these shares were acquired before 2012 it must be Long Term Capital Gain. Am I correct?

Just for my own education how would Turbo Tax or the IRS determine the tax on Capital Gain if the basis is not known? Is it assumed as zero basis?

GeorgeM777

Level 11

Yes, if your shares were acquired before 2012, the holding period is long term. A holding period greater than one year--a year and a day--is considered long term. One year or less is considered short term.

If you don't know your cost basis, TurboTax won't be able to determine whether you have a capital gain or a capital loss. It is unlikely that the IRS will know your cost basis either. Therefore, you will need to do the research and then enter your cost basis into TurboTax. If you know, or can determine, the approximate time period when you acquired the shares, you can do an historical price search using a financial news site, such as Yahoo Finance, to get a good idea of the price you might have paid for your shares. You are correct in that if you cannot determine your cost basis, the IRS may assume it is zero, and you will pay capital gains tax on your entire proceeds from the sale. Thus, do your research and find the price you paid for the shares.

@LuongPNguyen

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wbraden3

Level 3

Regarding the basis of your shares from 2021. Normally it's what you paid for the shares. But, you may have received a non-taxable distribution from the company, which is regarded as a return of capital, and reduces your basis.