Leaderboard

Why do italics make this sooooo much better??? I'm crying. Also, Marty McFly is my favorite. Just saying.

Go with zero basis. Tell the client what the tax is on the total gain, and let them decide if it's worth it. They might even be in the 0% federal bracket for LTCG.

What to do next depends on how much the gain is with $0 basis, and how much effort the client is willing to put in to track it down, and how the stock was acquired. I had one client who had inherited stock from a grandparent who died in the early 70's. We had solid starting basis from that, and with the help of a broker traced the original stock through splits and spin-offs. It took hours - and the client gladly paid me for those hours tracing and calculating. Another client had no recollection, the total amount of sale was small, and he decided not to bother. As others have said, it is the client's responsibility to give you the information. If you're going to get dragged in to calculations, it still has to be based on information the client finds somewhere, you need to be paid separately from tax preparation, and it's not going to be cheap.

I contact the client and ask them to confer with the broker to provide the information. The information is there, and someone (but not me) has to track it down.

I never use a TB. I much prefer a BS & PL because they give you totals that you need, and TB's do not give those totals.

I actually prefer a TB (if it is in excel format). I can set the prior year up next to it and look for reasonable changes from the prior year and I find it easier to make my AJEs if any are required. Most of my clients don't know what a TB is, so I only get the BS and IS from them (if I am lucky, some try to just give me the check register). Tom Modesto, CA

I worry too Tom. I keep files close to home. Am I paranoid? Who is asking?

Also, BigCharts.

if the taxpayer has any clue of the date of purchase you can use Yahoo historical price data and have a reasonable idea of the original cost which is supposed to be adjusted for stock splits etc.

I have two hard drives. C drive is an SSD with my OS and other programs. The 2nd drive (E drive) is a traditional HD, where I keep all my documents and files. Both are encrypted with BitLocker. When I turn my computer on, I'm prompted for a password. Then I need to unlock the 2nd HD. If I forget and I try to access something, I get a message saying no access. I have Win10.

Not crazy at all. I think about it as well. Frankly, I use encryption because the state will come after ME if client data is breached. If I have done everything on their little checklist, I am off the hook as far as state prosecution goes. Since I am not fond of either orange or jumpsuits, that is important. For the actual consequences of data breach, I have cyber insurance. There's only so much we CAN do. Belt, suspenders, duct tape, and staples. So, secure networks, no broadcast of wifi (ours requires the MAC address of a device to be entered in before it will admit its existence, then asks for password), encrypted drives, encrypted back up both local and cloud. Deleting any email that contained sensitive information (after printing to pdf), plus telling client first to delete it themselves and next never to do that again. After that, there's nothing in my control.

If they can't prove their cost basis to the IRS, they are supposed to use $0. It's up to the client to provide you with a date and cost basis. Reality is we have someone who will produce a cost basis and put it on their letterhead.

From my FBI client - never trust encryption. Ever. My nephew works at Apple headquarters and when I asked him about it his reply was basically to never expect anything that is encrypted to actually be safe. He compared it to putting the "club" on your car steering wheel - the hope is that the crook will just go to an easier target. I trust encryption only because there really is no other alternative. I don't use cloud storage not because I think the data will be stolen but because I'm more concerned that in an emergency event, I may not be able to access that data for a few months which doesn't work for me.

I've used it for several years. I haven't seen a single con.

I do not think they make jumpsuits that small

I do what Abby says. I use zero basis and tell the client the results. If that motivates them to search their purchase documents or work with their broker(s) or ask grandma when grandpa died or..., then the client will give me dates and basis. If they need help, I tell them my hourly fee -- IF I have the time.

I enter the 1099MISC so IRS can see the client is reporting the info.

I prefer BS & PL. I mostly have QB clients now. A few with poor accounting, small. I usually use the old accountants working trial balance format that I set up on an Excel spreadsheet. Only I start with last years ending balances, add the client's current year activity and any other AJEs from me. Then get my ending balances.

It's your responsibility to prepare their tax return based on the information available, it's your client's responsibility to provide you with the relevant information. The tone of your comments imply that you are trying to fix this for them, which puts you in a difficult situation ?

I agree with Tom. Takes a little extra time setting up formulas the first year but after that is makes it much quicker.

My IT guy set it up with my new computer. I hope that it's working. After the initial encryption, I don't notice anything.

I have a question...and I hope you won't think I am some conspiracy nut when I ask it. Do any of you think about the fact that some corporation, with a profit motive, is holding your data, on their servers, in their cloud, and maybe they think of it as their data? We know how valuable our client information is to us, and to thieves, but also to other corporations. Are any of you afraid that your backup software is allowing your data to be mined and sold without your knowledge? How would you know if it was or wasn't happening. I know this sounds crazy, but I think about these things. Tom Modesto, CA

The thing I liked least about Carbonite is that frequently changed files, like tax returns, QuickBooks, Excel, Word, etc. are only backed up once every 24 hours. That's a large window for our most precious data to be at risk, and it was totally unacceptable to me. The think I like best about CrashPlan is that it will back up open files and frequently changed files every hour (or 15 minutes or 2 hours per a preference you set). CrashPlan is $10/mo per computer, which can get expensive for a lot of computers. There are a ton of options out there: https://www.lifewire.com/online-backup-services-reviewed-2624712

I used Parsons years ago for my own and my son's returns. Parsons sold to Intuit, and Intuit offered me a cheap price, maybe matched the old Parson's price, maybe for three years. I did use TurboTax for at least one year. Then I was a controller in a small firm with an outside accountant, so I went into his office for a day each year to bang out our returns on his pro software, Pencil Pushers, maybe. Then, my father's estate got added into my mix, plus IL, and I married a teacher with employee expenses. I decided to take the HRB course and learn what I needed to know. Joined HRB for a decade and prepared all our returns on their TPS. We used ATX for all the entity returns. Went out on my own with ProSystem fx.