- January 31, 2012
NetWorth Service offering free webinar on Feb. 1 to explain crucial new rules
The much maligned IRS isn’t likely to win any new fans this season as it rolls out new, confusing cost basis legislation that could easily throw an expensive monkey wrench into the average Joe’s tax return.
Brokers and financial institutions have prepared for several years to provide the adjusted cost basis of securities to their clients. They are required to do this for stocks purchased after Jan. 1, 2011, mutual funds purchased after Jan. 1, 2012 and options, debt securities and other financial instruments acquired after Jan. 1, 2013. After these dates the investment is known as “covered”. However, the taxpayer is STILL responsible for reporting accurate cost basis for an investment purchased prior to these dates (known as non-covered).
“There is a sizable disconnect between what the broker must report under the cost basis legislation and what the taxpayer is still responsible to accurately report to the IRS.” said Nico. R. Willis, President and CEO of NetWorth Services, “Brokers are only responsible for cost basis for securities purchased after 12/31/10 but the taxpayer is responsible for the cost basis no matter when it was purchased. The majority of current stock holdings were purchased before last year, so different investment scenarios can potentially cause confusion.”
And not only confusion, but financial consequences if done incorrectly. The IRS is cracking down on under reported cost basis, and claiming ignorance of the law isn’t a defense that works with the government. Incorrect calculations can result in fines up to $1000 for each occurrence, and if the IRS can determine that you willingly ignored the law, the fine could rise to $5000/occurrence.
When it comes to the IRS, knowledge is power and can keep your hard-earned dollars in your wallet instead of the government coffers. To learn the ins and outs of this new legislation and how to use it to your advantage, don’t miss NetWorth Services FREE interactive Town Hall Web Meeting entitled “How will the New Cost Basis Legislation Affect Me.” slated for Wednesday February 1, 2012 at I pm EST.
The webinar will teach participants the TOP FIVE things they must know about this new legislation including:
- Covered vs. non-covered securities and how to accurately report cost basis
- How to sell a security using the right method (hint, not usually the default method) and save thousands in taxes
- Avoid Wash Sale violations when selling and buying similar securities within 30 days
- Understand complex rules that apply to cost basis on gifted or inherited securities
- Be aware of the steep financial penalties for knowingly or unknowingly using the wrong cost basis
The FREE, open to the public webinar can be accessed by registering HERE or by phone at 602-222-6380.
NetWorth Services, Inc. (NWS) (www.networthservices.com) is an award-winning financial web application and database software company, headquartered in Phoenix Arizona, with offices in New York and Philadelphia, PA. In response to the increased demand for an accurate and efficient automated cost basis calculation solution, NetWorth developed its flagship product, Netbasis in 1997, which quickly and accurately determines the adjusted Cost Basis or original price of financial securities regardless of their history of capital changes. Financial solutions developed by NetWorth have been adopted by many leading financial institutions, transfer agencies, tax preparation software companies, accounting firms, money managers, government agencies, Fortune 500 companies, universities, endowments and individual investors.