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Category: Tax
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Experience:  over 40 years experience in tax matters
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We just got a notice from IRS saying they had changed some

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We just got a notice from IRS saying they had changed some of our information. This was filed as a married filing seperately return. Nita also filed that year married filing seperately and had no profit and she got a similiar letter. Both letters said we had not sent our W-2 and dividend info so they cut the amount Steve had withdrawn when he received a distribution from UBS (our fianancial advisor). We called H & R Block as we had used their software and they explained how we had mistakenly doubled Fed. tax from Steve's W-2.
They assigned a case number XXXXX are sending a letter to IRS. Is it too late to do an amended return filing joint as H & R block showed us we would be far better off. They said we could but I thought Oct. 15, 2011 was the last day we could file an amended return for 2008.
Also UBS did not send a 1099 R showing tax withheld from our our proceeds but they did send a 1099 R to us after asking for our entire year report. UBS called back and said IRS should have the supplemental info as it was sent electronically.The report said that we had dividend's paid of 23,000 and that we had a short term capital loss of $124000. They reinvested our dividends for an even bigger loss. Do we have to report the $23,000 as part of our AGI? Also please explain our basis.
Steve retired June 30, 2008 and they rolled over his 401K in the amout of $430,000 and their end of the year report said our ending balance was $288,900. So was our basis $430,000 or $288900 or something else. The bulk of our distribution was from the cash account so we did not gain or lose on that account so I could not show a loss on the distribution I understand that part and we had witholding taken out but IRS sent a transcript to IRS about the rollover and beginning and ending balance but not an a 1099 R to IRS. I had put in our distribution but IRS said they had no proof. Please help. Thanks, Nita
Submitted: 3 years ago.
Category: Tax
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

Hi Nita,

I answered you the other day. Here is the response I sent you.

First I need to advise you that it too late to file an amended return for 2008. That deadline expired on April 15, 2012.

You should have reflected the interest and dividends as income on your return as well as the capital loss. The loss would not be entirely usable on the 2008 return since there is a $3,000 limit for the net deductible capital loss.The remainder carries over for future use, year by year.

As to the failure by UBS to reflect the tax paid on your 1099-R that will require correspondence between you and the IRS to get resolved since UBS is not able to assist at this time. Include a cover letter explaining this and a copy of your year end statement from UBS to show the tax paid. The IRS will allow this due to the circumstances or provide you the time to secure a corrected 1099-R.

The IRS will make all other changes to the return and send you a letter showing their final changes. Be sure to mention the interest, dividends and capital loss in your correspondence so all these items can be corrected.

You should also check your tax returns for the following years to be sure the capital loss carry over has been reflected on Schedule D so that you do not lose this tax benefit. You can still amend 2009, 2010, and 2011 using form 1040X and its attachments. These forms are available at You will also need to notify your state about the final IRS changes to 2008 and file amended state returns if any changes are made using the 1040X.

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