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On Form 8949 of my 2017 tax return, I reported short-term (Box C) & long-term (Box F) "transactions not reported to you on Form 1099-B".

Will the IRS allow me to file an amended return that changes the cost basis methods that I used for these transactions?

Note: The assets I sold were cryptocurrencies. I'd change the cost basis methods to ones that are more tax-efficient, and thereby, claim a tax refund.

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I think a change in cost basis method only applies to closing trades dated after the change.

But to specify trade lots, just keep your own accounting of trades and give each opening trade a unique "ticker symbol". Then there is some optional match-up possible between the report received from the financial institution and the home accounting. If the official financial report goes to the IRS then additional codes might be needed on the 8949 or a letter of explanation might need to be included with the tax return. The accounting of specified trade lots should be kept as the trades are made and not organized later.

Well, if the entire position is not being sold then sell the specified lot that produces the smallest gain. Even a capital-loss carry-over is allowed to build-up from one year to another. A tax credit is an asset.

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  • I don't think this is correct. From what I've read, if you change your cost basis method you have to restate all prior tax returns that use the old method. I'm just not enough of a tax expert to give my own answer :)
    – D Stanley
    Commented Oct 23, 2019 at 19:31
  • Fidelity, for instance, says that all future closing trades will use the new cost basis method. fidelity.com/customer-service/…
    – S Spring
    Commented Oct 23, 2019 at 19:37
  • I'm asking about "transactions not reported to you on Form 1099-B". I've updated my question to make that more clear. You wrote, "Now the accounting should". Did you mean "No" instead of "Now"? And, did you mean "must" instead of "should"? I'm not asking about what I should do. I'm asking about what I'm allowed to do. I also updated that part of the question to make it more clear what I'm asking.
    – ma11hew28
    Commented Oct 23, 2019 at 21:47
  • There is no 1099-B but there is a financial record sent to the trader from the financial institution. The trader's accounting can be different from the official record as long as there is some fundamental match-up that translates from one accounting method to another. The IRS can look at your financial records and accounting methods.
    – S Spring
    Commented Oct 23, 2019 at 22:12
  • @D Stanley - Brokerage firms default to FIFO. At any time, the seller of the security can designate a specific position be sold and for future sales, if none is designated, it defaults back to FIFO. That is what is spelled out in the Fidelity link. But that information is insufficient. You are correct. If a taxpayer has selected the average basis method, he is indeed locked in to that reporting method unless he restates all prior tax returns that use the old method. Commented Jul 20, 2020 at 11:32

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