Long Term Transaction reported as Short Term Transaction without basis on a 1099
An investor has held the XYZ for over 20 years. The XYZ company then spins off the ABC company. Over one year after the spin off, the investor sells his shares in the ABC company. It is my claim that the sale of the ABC stock should be reported on the 1099 as a long term transaction with unknown cost basis. However, the broker is reporting it as a short term transaction with unknown cost basis.
If is correctly shown as a long term gain on the tax return then I am thinking that this is a red flag for the IRS. Please comment.
Bob
(1)1 Comments
Sorted by latest first Latest Oldest Best
Sorry, couldn’t add more comments above to ask questions. Hence, giving you an answer. Please also see my comment above.
To find out how the cost price was adjusted you should be looking into the scheme documents published by the ABC company.
To answer your question, it is brokers responsibility to provide cost basis of shares you held. Hence you can complaint and try to get the 1099 statements corrected by the broker at the soonest.
The long or short term transactions are decided by the broker holding your shares. Again it depends totally on how the corporate action was planned and executed.
Terms of Use Privacy policy Contact About Cancellation policy © freshhoot.com2025 All Rights reserved.