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Step by step explanation please to figure this out. 1099-

B was received under the...
Step by step explanation please to figure this out. 1099- B was received under the following:
UNDETERMINED TERM TRANSACTIONS FOR NONCOVERED TAX LOTS.The instructions states to Report on Form 8949 Part 1 with Box B checked or with Box E checked.1099-B Acquired Date on all the transactions read N/AAdditional information on each PRINCIPAL PAYMENTHow does this work trying to figure which are long term or short term transactions without dates?Also, there are no quantity sold.Factor given is 0.292907230000So for example GNMA (GinnieMae) on 02/01/2017 Proceeds of $405.69 principal payment. That is all the information given. Called the Financial Service who issue the form and they can't help.I am under the understanding that Principal payments are not gains?How do I handle the reporting of these principal payments?
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3/16/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,719
Experience: Taxes, Immigration, Labor Relations
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If you tell a bit more regarding that transaction - that might help...

which box that amount is reported ?

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Customer reply replied 1 month ago
If you are asking the amount of $405.69 it's under 1d Proceeds 6 Reported Gross or netIs that what you are asking?
Customer reply replied 1 month ago
It's under Form 1099-B Proceeds from Broker Transaction.

OK - that looks as a special payment related to "bad loans" - it is a return of the principle.

Report that sale as having same basis - so it will be zero gain.

But do report that payment.

The actual basis for security should be adjusted (reduced by that payment.

That should resolve your reporting issue.

Questions?

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Customer reply replied 1 month ago
That makes sense. Thank you. Is there anything out there that reference this?
Customer reply replied 1 month ago
Do you have any idea what that factor stands for?

I just looked up for possible odd payments GNMA made - and run into issues related to judgments and legal settlements.

The client should have settlement letters - but might overlooked and shredded it.

So - that is a compensation for inflated values - and essentially - that is a repayments.

The factor stands for percentage of repayment as agreed - based on value of shares purchased and on which day they were purchased or sold...

If shares were previously sold - your basis is zero - and the full value is a gain - assumable long term.

But if you still own shares - that will be reported as I suggested - as a partial sale with zero gain but the basis is adjusted.

It might sounds odd - but we have to deal with that somehow.

I doubt the IRS will ever question such reporting.

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Customer reply replied 1 month ago
Break down on the 1099-B shows the interest paid less the investment expense reported on a 1099-INT. Then the 1099-B reports the principal payments. During research it is stated: Ginnie Mae bonds are mortgage pass-through securities. The monthly payments from a GNMA bond come from the monthly payments on a pool of government-guaranteed home mortgages. Just as a monthly mortgage payment consist of interest and repayment of principal, the payments from a pass-through bond consist of both interest and principal. Only the interest you receive from a GNMA bond is taxable income -- the returning principal is not taxable. The 1099 from your broker will break out interest and principal repayments for any GNMA bonds you own.
Customer reply replied 1 month ago
I should report the Principal payments with same basis as payments for a neither gain or loss. Your thoughts on that? One thing I do notice on the report is the followingGNM PL 738433x 04.5000 DUE 06/15/41 Factor 0.126557720000 / CUSIP: 3620ASLN7Should I concern myself with that information? Still don't have acquired date or basis. And was wondering if this statement above means I need to factor that in, in some way. why can't they make this simple

The CUSIP number is ***** unique ID assigned to all stocks, bonds and other securities in the US and Canada for distinction purposes.
Potentially - we may find that specific security
https://www.cusip.com/cusip/index.htm
.
I found this specific item here
https://www.ginniemae.gov/investors/disclosures_and_reports/Lists/Updates/Attachments/3/Sept12_RPB_Corr.pdf
so it existed at least in 2012 - so for sure long term.
DUE 06/15/41 - means maturity date
So that is likely 30-year mortgage backed security issues most likely on 06/15/11
interest is reported separately
Such items are rare owned by small investors

Lev
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