Brokerages face 2011 start date for reporting cost-basis info

Regulations proposed last week by the Internal Revenue Service would leave brokerage firms little time to begin reporting cost basis information to customers.
DEC 08, 2009
Regulations proposed last week by the Internal Revenue Service would leave brokerage firms little time to begin reporting cost basis information to customers. The proposal, which was published in the Federal Register, would require brokerage firms to begin reporting cost basis information on stocks traded by their customers on or after Jan. 1, 2011. “It's not a lot of time,” said Stevie Conlon, tax director for the GainsKeeper division of Wolters Kluwer Financial Services, which produces software used by brokerage firms and investors for keeping track of cost basis. “People were hoping the IRS would issue guidance in enough time so that operations systems and software could be updated,” she said. Comments are due on the proposal by Feb. 8, which means the final regulations likely will not be out until May or June, Ms. Conlon said. That would leave only six or seven months for brokers to prepare for the new requirements, and most firms need a year, she said. The legislation requiring brokers to provide the information to their customers was enacted last year. The proposal does not exempt from reporting small “wash sales” in which losses are offset by purchases, or mass trades by active traders who use computer software to execute thousands of transactions at a time, Ms. Conlon said. Corrections for minor errors also will have to be sent to customers, who could become alarmed, she added. Representatives from the IRS were not available for comment.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.