UPDATE: IRS Issues New Cost Basis Reporting Proposals – Regulation Targets Fixed Income and Options

The U.S. Internal Revenue Service (IRS) recently issued a document with proposed regulations for the basis reporting of fixed income and options. Overall, the suggested mandates address some very specific issues, including requirements for a transfer of a debt instrument or an option to another broker and for an organizational action that affects the basis of a debt instrument or option.

In addition, the document reflects changes in the CBR law made by the Energy Improvement and Extension Act of 2008 (the Act) that requires brokers to include the customer’s adjusted basis in sold securities and to classify any gain or loss as long-term or short-term when reporting securities to the IRS.

To address any concerns from the industry, the IRS will hold a public hearing to discuss the proposed regulations on March 16, 2012.

Since its inception in 2008, the regulations have continued to evolve, making it now more important than ever for firms to stay informed. You can read the complete document here, or you can reach out to Scivantage with additional questions about how this might impact you. Also, join the conversation through an open dialogue on our Linkedin Group – Cost Basis Reporting Forum.

Posted in Basis reporting legislation, Cost Basis, tax management and tagged , .