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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I got a 1099-B with 63k of gross proeeds on it but I was under

Customer Question

I got a 1099-B with 63k of gross proeeds on it but I was under the impression these mutual funds weren't being sold, I thought they were just being transfered to another advisor within the same company. Because if this change, my taxes have gone from getting a $700 refund to oweing more than $5000!!! What do I do???
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
Hello rainbow,

Unfortunately, there is nothing you can now do to reverse the sale of the mutual fund, and you will have no choice but to pay tax on the amount of the gain you had from the sale.

You may try contacting your financial institution to see what their explanation is for this error, and to see if they are willing to pay you any type of restitution, but it would not change the fact that you owe tax on this transaction.

We have had numerous customers come through this forum with similar problems, which is why it is always advisable that you check all correspondence you receive from your financial institution as well as your monthly statements, to make sure there are no transactions being reported which you did not authorize.

If this was helpful please press the Accept button.

Thanks for using JA.

Customer: replied 5 years ago.
Will you accept $9 as that is the balance in my account and now that I might be oweing a quarter year's worth of my salary to federl taxes... I will call the financial inst to see if there is something that shows I actualy LOST money, as the 63k was proceeds, but I bougt them for more a few years back so I didn't gain anything... Thanks for your hel. Is $9 aceptable?
Expert:  Merlo replied 5 years ago.
Hello again rainbow,

Were you reporting the entire $63,000 as income?? If you were that is not correct. You do not owe tax on the entire $63,000.

How much did you originally pay for this mutual fund?

As far as the $9, when you accept the question, it will only charge what you have in your account.



Customer: replied 5 years ago.
We really have no clue how much we originally paid, as it was all purchased throughout the past 14 years. We were just imputting the 1099B with turbotax software and it was counting it as capital gains, even though it was only proceeds, not actual gains.
Expert:  Merlo replied 5 years ago.
Hello again rainbow,

You should only be paying tax on any gain you had from this sale. In the case of a mutual fund, you may use the average price of what you paid for the fund, if you purchased the shares in several different transactions.

If you have no record of what you originally paid for this stock, your financial institution may be able to help you obtain that information. If not, there are plenty of websites that give historical information for stock and mutual fund prices, where you can try to estimate what you paid for these shares.

In Turbo Tax you should be entering this transaction as investment income, sale of stocks. It will then ask you for the amount reported on the 1099-B and will also ask you for your basis (cost). The difference will then be your gain or loss and that is the only thing you will owe tax on, if you even had a gain.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.

Customer: replied 5 years ago.
OK thank you, XXXXX XXXXX do some more research but at least you have guided us on thinking about what we need to do next.
Customer: replied 5 years ago.

OK thank you, XXXXX XXXXX do some more research but at least you have guided us on thinking about what we need to do next.

 

PS- the program here is asking me to put additinal card information for another $6.00....

Expert:  Merlo replied 5 years ago.
Hello again rainbow,

Unfortunately I do not work in the "money" side of this website, so I am not sure how that works.

It looks like originally you pledged a deposit of $15, and I guess that is why it is asking for an additional $6. I don't know if there is anywhere there for you to change the amount to $9 or not.

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Merlo
Merlo
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25+ years tax consulting. Specializing in returns for US citizens living abroad