2011 Tax Changes for Businesses and Investors: Broker Reporting

Investors have been affected by the recent changes in tax law. The reporting required for brokers transferring covered securities alters the information shared with the IRS.

Effective Jan. 1, 2011, every broker filing an information return reporting the gross proceeds of a “covered security” such as corporate stock, must include in the return the customer’s adjusted basis in the security including any short-term or long-term gain or loss.  A covered security includes all stock acquired beginning in 2011, except stock in certain regulated investment companies (i.e, mutual funds) and stock acquired in connection with a dividend reinvestment plan (both of which are covered securities if acquired beginning in 2012).

We would be happy to answer any questions you may have regarding these changes to the tax code, as well as tax planning in general.

© 2011 Thomson Reuters/RIA. All rights reserved.

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