In 2007, my father (now deceased), unbeknownst to me, was trading stocks in a custodial account under my name. He actually ended up losing money on the trades, but he never filed taxes for them. Scottrade only reported his sales to the IRS, not what he paid for all those stocks, and since he never filed anything and since the account is under my SSN, the IRS has been under the impression that I made around $55k in 2007.
After tracking down all the trades and doing all the math, he spent around $60k on those stocks, so it was actually a net loss of around $5k (in fact, the losses were greater than my total income on my W2).
Further complicating things, much of the stock that was sold in 2007 was purchased in 2006.
And a tiny little matter, there was also $16.08 worth of interest earned on the account in 2007.
For 2007, I've got:
- My W2.
- "Composite Substitute 1099 Statement Summary" and "Composite Substitute 1099 Activity Detail", which show the interest and the net amount for the sold stocks, and was furnished to the IRS.
- "Supplemental Information" which shows the net amount for that subset of stocks purchased in 2007, and was not furnished to the IRS.
- Order confirmations from Scottrade for each of the purchases of stocks which were later sold in 2007.
I've gone through and calculated the total paid for all those stocks which were sold in 2007. I've found this 2007 1040: http://www.irs.gov/pub/irs-prior/f1040a--2007.pdf
But I have no idea how to fill in the stocks or interest, or if that's even the right form in the first place.