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Hello, I have a question on amended tax returns. I had a

Hello, I have a question on...
Hello,

I have a question on amended tax returns. I had a bunch of stock sales in 2012 for a total value of about 14000 dollars for a gain of about 900 dollars. But my brokerage has reported these without yhe cost basis. Basically I forgot to add a schedule D. Now I contacted a CPA and he told me to do an amended returns.

Now I want to know if that is the right thing to do. Or should I wait for a CP2000.
Will any of this increase the probability of a non CP2000 regular audit

My AGI is about 118000 dollars. No schedule A,C E or form 2106. Two regular w2 and interest and dividend income.Schedule B total is about 5000 dollars int and dividend income. And then this missed schedule D. What is my probability of audit. I am a bit paranoid as I don't want audit as I am in the middle of immigration processes this year.
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Answered in 6 minutes by:
8/27/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,593
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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MyVirtualCPA :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

MyVirtualCPA :

The CPA is correct - you should file an amended return. You're going to have to keep documentation of the cost basis of your stock, since it was not reported. Even after you file the amended return, you will get a CP2000 because your reported income will be much less than what is reported to the IRS. Ideally you would have your brokerage firm correct the statement they sent you, but if they don't you will have to send the IRS documents on your cost basis

MyVirtualCPA :

You will most likely get a CP2000 but that does not increase your probability of a regular audit

Customer:

After amending the return how will I still get a CP2000. As with the amended return I guess my CPA will also include the statement from Brokerage Firm that was sent to me which has the cost basis and the sale value.

MyVirtualCPA :

You will get a CP2000 with the amended return because your gain is $900 but the IRS will think it's $14,000

MyVirtualCPA :

they won't have the cost basis piece

Customer:

So you are saying even if I did the Schedule D they would have still sent the CP2000.

Customer:

And one last question.

MyVirtualCPA :

Okay -- they will send the CP2000 unless your gain matches their gain and if no cost basis is reported the entire amount is looked at as gain by the IRS computers - but you won't owe tax on all that you will just have to send in more information

MyVirtualCPA :

Okay

Customer:

I know it is subjective and would like an answer the best you can. Based on my profile is chance of audit around 1% or is it more or less

Customer:

If you cant answer this question that is fine

MyVirtualCPA :

I can't tell you what the probability is, but I can tell you that as long as you have records of your cost basis you will be fine no matter if you are audited or not

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,593
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Thanks, Paloni for your positive rating, and generous bonus. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
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