IRS seeks comment on cost-basis guidance

The IRS is requesting input on implementing the cost-basis reporting requirements included in the bailout bill passed in October. Comments are due by March 2.

Customers’ cost basis will need to be reported for stock purchases beginning in 2011, mutual funds and dividend reinvestment plans in 2012 and debt instruments, options and other securities in 2013. The IRS has requested comments on 36 topics in eight categories: the applicability of reporting requirements; basis method elections; dividend reinvestment plans; reconciliation with customer reporting; special rules and mechanical issues; transfer reporting; issuer reporting; and broker practices and procedures.

According to Stevie Conlon, tax director for GainsKeeper, in a Cost Basis Reporting Resource Center blog for Wolters Kluwer Financial Services, “The specifically listed topics included in the Notice and the Mar. 2 deadline for comments indicate that the IRS intends to work diligently to release guidance that will help brokers and other affected persons comply with the new cost basis reporting law.”