{"id":1409,"date":"2014-08-13T09:16:27","date_gmt":"2014-08-13T13:16:27","guid":{"rendered":"http:\/\/keysolutions.us\/blog\/?p=1409"},"modified":"2014-08-25T11:04:20","modified_gmt":"2014-08-25T15:04:20","slug":"stocks-have-zero-cost-basis","status":"publish","type":"post","link":"https:\/\/keysolutions.us\/blog\/stocks-have-zero-cost-basis\/","title":{"rendered":"STOCKS HAVE ZERO COST BASIS"},"content":{"rendered":"<p>A recent court case (<em>Hoang<\/em>, U.S. Court of Appeals, 11<sup>th<\/sup> Circuit, May 6, 2014) illustrates that if a taxpayer cannot substantiate cost of securities (stocks, bonds, etc.) sold, then the cost basis is zero. If a taxpayer works closely with his\/her tax professional and uses the tax pro for <a href=\"http:\/\/www.keysolutions.us\/svcs_tax.htm\">tax planning<\/a> services in addition to <a href=\"http:\/\/www.keysolutions.us\/svcs_tax.htm\">tax preparation<\/a>\u00a0services, the taxpayer can begin the process of substantiating the cost basis of securities sold to withstand an IRS challenge.<\/p>\n<p>In <em>Hoang<\/em>, the taxpayer was found to owe the IRS $5.1 million based on his $14.8 million of capital gains. Hoang\u2019s only support for his cost basis was a one-page Scottrade Composite Substitute 1099 Statement, and a one-page supplemental information statement from Scottrade showing a cost basis of $12.6 million. The court found the taxpayer\u2019s these documents to be incomplete and unauthenticated. There was no itemization of what securities were in the lump-sum cost basis, nor any support as to what each security was sold for and what each security cost. The taxpayer\u2019s documentation prevented the IRS from matching how much Hoang paid for each security sold. The court found that the documentation fell far short of providing cost basis evidence sufficient to rebut the presumption of correctness enjoyed by the IRS. Unfortunately, a bad case can be used by the IRS as precedent.\u00a0Now whenever a taxpayer is found to lack proper documentation to support the tax basis of stock sold, the IRS agent will cite <em>Hoang<\/em> and propose that the entire sales proceeds be treated as gain.<\/p>\n<p>If you want to learn more about your personal tax situation, we invite you to call <a href=\"http:\/\/www.keysolutions.us\/\">610-594-2601<\/a> today to make an appointment at our <a href=\"http:\/\/www.keysolutions.us\/index.htm\">Exton PA CPA office<\/a>to discuss your situation. You can also schedule a consultation at <a href=\"http:\/\/keysolutions.us\/consultation.htm\">Click Here<\/a>.<\/p>\n<h6><em>Copyright \u00a9 2014 Keystone Financial Solutions, P.C. All rights reserved. BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"<p>A recent court case (Hoang, U.S. Court of Appeals, 11th Circuit, May 6, 2014) illustrates that if a taxpayer cannot substantiate cost of securities (stocks, bonds, etc.) sold, then the cost basis is zero. If a taxpayer works closely with his\/her tax professional and uses the tax pro for tax planning services in addition to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[],"class_list":{"0":"post-1409","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-irs-tax-planning-ideas-tips-news","7":"entry"},"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9W9tf-mJ","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/1409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/comments?post=1409"}],"version-history":[{"count":2,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/1409\/revisions"}],"predecessor-version":[{"id":1411,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/1409\/revisions\/1411"}],"wp:attachment":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/media?parent=1409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/categories?post=1409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/tags?post=1409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}