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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7195
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I took money from from an account I have at UBS. I took the

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I took money from from an account I have at UBS. I took the money from Equities mutual fund. The money was used to fund my Roth Ira. The Roth Ira account is located at UBS. The IRS stated that I have to Liam all as income? Is that correct? Or is a matter of calculating the cost basis of all the shares purchased.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Customer: Ok.
Stephen E. Grizey :

It doesn't matter where the money went. When you transferred the funds to your Roth account, you have to liquidate the mutual fund. When you liquidated the mutual fund you had a gain or loss. That is what you need to report, not the gross proceeds from the transaction. What year are you dealing with here? 2010?

Customer: Yes. I never received a 1099- b to see gain or loss.
Stephen E. Grizey :

The 1099B just reports the gross proceeds; check your end of year statement from the mutual fund; it may actually be a substitute 1099B; was your answer "yes" to the question of which year, 2010?

Stephen E. Grizey :

If so you would need to locate your 12/31/2010 statement.

Customer: yes to year. IRS is is stating that I did not report income. That it was reported by others to them.
Stephen E. Grizey :

Right. The mutual fund would have reported the sale of the mutual fund shares to the IRS.

Stephen E. Grizey :

You need to send in a 2010 Schedule D; did the IRS ask you for anything specific other than a lot of money?

Customer: no. They only ask for money and the interest on the money. I have a 1099 schedule d. It was included in the documents. However, we used turbo tax and several items are imported in to our records. This was not. Should I contact the IRS and ask them what to do? I want to understand what went wrong.
Stephen E. Grizey :

What do you mean a 1099 Schedule D? do you mean a 2010 Schedule D?

Customer: Sorry yes 2010 schedule d
Stephen E. Grizey :

You should prepare a 2010 Form 1040X to include the Sale of the mutual fund which would require a Schedule D be attached

Stephen E. Grizey :

Then you would send that in with the notice and a check for whatever is due; if there's a loss on the mutual fund shares sold, they will owe you money

Customer: So when I send info to IRS I should have this form? Also a copy of the year end paper from UBS ?
Stephen E. Grizey :

You don't need the UBS data as the IRS already has that; the forms are available in turbo tax -- you should be able to do the 1040X on turbo tax for 2010 or you can get the forms at

Customer: Ok. What happens if I send this and they are still not satisified? What are my options? Listen to what they say? Or meet with them? Turbo tax offers helps with audits. Would it be in my interest to contact them. Or can I ask you future questions?
Stephen E. Grizey :

You can ask me future questions; just ask for "Steve G" at the beginning of your question. But don't worry, the IRS knows that you don't owe that much money; they just use the gross proceeds as the gain as they don't have the cost information & they know using the gross proceeds will get your attention.

Stephen E. Grizey :

Please remember to rate my answers in order that I can receive credit for my responses.

Customer: I found the paper work for the mutual fund. You say to include a check. How do I determine the dollar amount for the check?
Stephen E. Grizey :

If you fill out the 1040X, it will reflect the balance due or the refund when the form is completed

Customer: Can that be done on turbo tax? Printed and sent to IRS? I feel that I should send info to IRS with return receipt to show proof. Is that allowed?
Stephen E. Grizey :

Sure, you can do that & yes you should be able to do the 1040X on Turbo tax

Customer: Ok. Thank you. You said I can ask future questions and ask for you. How do you do that?
Stephen E. Grizey :

Just ask for "Steve G" at the beginning of your question in the tax or financial forums

Customer: Alright. I appreciate your help. Thanks.
Stephen E. Grizey :

You are welcome

Stephen E. Grizey :

Please remember the rating.

Customer: Ok. If I come back to I have to pay again?
Stephen E. Grizey :

If you come back for help with a different question or help with the 1040X, yes.

Customer: What does 1040 x mean? Extension or correction?
Stephen E. Grizey :

1040X is an amended return which you will prepare to correct your original filing to include the the mutual fund transaction

Customer: Again Thank you!!!
Stephen E. Grizey :

Ok you are welcme

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