Filing Requirement

[Christian]

Every now and again a client's income falls below the filing threshold. I normally advise them to not file for the year for a nominal fee. They can return each year to assure themselves that they do not need to file for later years as some do since nobody ever seems to recall I advised if their situation changed to come back in to check it. One such client came in this year and her income no longer exceeds the filing threshold. She now has a small brokerage account having been left an inheritance which she took to EdwardJones. The broker sold a position in the account losing some $1,500 which of course reduced her income. On reflection I can recall no rule which would require the filing of a return just because of a trade in a client's brokerage account unless it produced a result which helped carry the client income over the filing threshold. But I just might have overlooked one of those sneaky IRS rules requiring such a filing so I am putting this in for comment.

[Donnarae]

The irs doesn’t always recognize the basis unless reported on the 1040. I always file if the sales exceed the threshold. 

[TAXMAN]

I always do the same. Sometimes just to protect a loss carryforward even if no tax owed.

[mcb39]

I would file for a minimal fee just because you never know if the IRS will recognize two plus two minus the loss.

[jklcpa]

I would also suggest filing, especially if including only the gross proceeds in income will put this client over the threshold. To do otherwise, the client may receive a CP2000 notice because IRS doesn't account for basis.

[Christian]

After reading the comments I have decided to go ahead and file the return. She will in fact have that loss to carry forward and brokers being brokers this probably will not be the only trade effected in this account. As noted a trade may be profitable requiring a payment of tax.