What is the new cost basis legislation?
Congress passed the Emergency Economic Stabilization Act on October 3, 2008, which requires brokers to report adjusted
cost basis for taxable accounts to the IRS and taxpayers via Form 1099-B beginning in 2011. The legislation applies to
securities acquired on or after the effective dates as follows:
- Equities posted on or after January 1, 2011
- Mutual Funds, ETFs and Dividend Reinvestment Plans (DRIP) plans posted on or after January 1, 2012
- Debt securities and options posted on or after January 1, 2013
The legislation also requires that the new Form 1099-B indicate if the gain or loss is short or long term, and the amount of any loss disallowed under the wash sale rules. Today, Eagle Accounting reports gross proceeds on sales as well as short and long term gain/loss for taxable accounts.This document answers frequently asked questions about cost-basis legislation.
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