Another Schwab Caveat

[Corduroy Frog]

A new topic, because the issue is different.  Schwab is not doing anything wrong (perhaps).

Sat down to two Schwab Brokerage statements:

The first is 1099-DIV:  starts ABC $96.00   DEF  $128.00   GHI  $144.00 .....All "qualified".

The second 1099-DIV:  starts ABC $96.00  DEF  $128.00  GHI  $144.00 .....All "qualified."

Dealing with a duplication, right?  So ignore the second document and put it away.  Not so fast.  We notice another listed company XYZ  $118.00 on the first statement, and $128.00 on the second statement.   Yikes!!  What's happening?

Schwab bought out TD Ameritrade.  Didn't wait for year-end, bought out during the year.  Some companies kept their quarterly dividends the same.  The afotementioned ABC paid $24 four times during the year, twice under TD Ameritrade, and twice under Schwab.  In like fashion, the others did the same.  However, XYZ paid $59 twice under TD Ameritrade, but then increased their dividends to $64, and then paid twice under Schwab.  Total $246.

So at first glance these two brokerage statements from Schwab appear to be duplicates.  They are not.  Taxpayer must report the total of BOTH statements as income.

 

 

 

 

[jklcpa]

Are the EINs for the reporting payer the same on both 1099s?  Is either marked corrected, amended, or have an issue date that indicates a more recent form?

Yes, Schwab bought out Ameritrade during the year, but your post above still does not explain why the 1099-DIV in your original post reported qualified dividends in excess of the total ordinary dividends.

[Corduroy Frog]

7 minutes ago, jklcpa said:

 but your post above still does not explain why the 1099-DIV in your original post reported qualified dividends in excess of the total ordinary dividends.

I don't know why that happened.  I've seen a few Schwab brokerage statements this year, and only one where the qualified dividends were split out differently from the ordinary dividends.  I don't know why that happened, and possibly Schwab will issue a corrected copy.

This post is a different situation from the one described above - why I began a separate discussion.

[NYTaxLady]

We have had clients bring in statements from both Schwab and TD Ameritrade.

We have not seen just two Schwab statements

[jklcpa]

1 hour ago, Corduroy Frog said:

I've seen a few Schwab brokerage statements this year, and only one where the qualified dividends were split out differently

Did those clients have Ameritrade accounts that paid dividends, or were they Schwab investors all year and not ever with Ameritrade?

 

[Corduroy Frog]

Good question, Judy.  The client who had the Schwab statement that was portrayed incorrectly also will have a Schwab statement for the TD Ameritrade period.  His stockbroker told the client that the portion for TD Ameritrade would not be sent to him before March, so I was unable to complete his taxes.

Situation with the Ameritrade takeover has turned into a real snake-pit.  Held up my dead brother's estate from being closed out, and with as many different accounts of problems, I've got to wonder whether the Schwab issuing office for these statements is centralized or issued from different locations.

[Abby Normal]

Schwab sent out an email saying corrected 1099s were being sent out.

[jasdlm]

I have about a dozen clients who were in TD Ameritrade/now Schwab.  They have all received TD 1099s and separate Schwab 1099s based on the timeframes before and after the platform transfer.

The purchase actually happened in 2020, but the TD Ameritrade accounts were transitioned the first half of 2023.  My understanding is that they transitioned the accounts in 'batches' rather than all at once, so I could see clients having different 1099 scenarios with respect to transfer dates, etc.

[Catherine]

As for your specific case here, @Corduroy Frog, check the account numbers and if there is a print date. Does the client have (or can they log in and get) monthly statements for tracing what they received in reality? Or, just wait for corrected forms. Discuss with client whether to double-count dividends for the purpose of filing extension determination of whether a tax payment is needed.

[Max W]

Don't Schwab and TDA issue pages detailing the date and amount of dividends paid?  This would confirm that were two divs paid.

[Corduroy Frog]

Yes they do.  And that turns out to be the saving factor.  If one takes time to look at the account number, they would send a message as well because they would be different.

Update on the "wrong" Schwab statement referred to in the earlier post.  The late statement finally arrived, and it was from TD Ameritrade.  Much easier to understand.

 

[Corduroy Frog]

I am seeing many of the problems I've described with Schwab are in the process of being corrected, caught up, resubmitted, etc.  To the effect that all will be well, especially for those who haven't filed yet.  Some time ago I opened a post that tax season was getting shorter.  We have LLCs now due March 15th, and if you have to wait until after March 1 to make appointments with clients who have brokerage statements, you have to cram those appointments into less than 45 days.

I would estimate that 2/3 of my clients have brokerage statements.

[BrewOne]

Any client who changed brokers, be sure and compare dividends from the previous year.

One of mine who switched from Wells Fargo to Merrill Lynch, went from $5,000 in dividends in 2022 (and no stock sales) to zero.  I have one consolidated 1099 from Merrill Lynch with no stock or mutual fund sales (interest only).  Obviously a 1099 is missing...and good luck getting something from Wells Fargo once you close your account.

[Randall]

Many of these firms are buying each other out.  Clients should have two 1099s from each company in the year of merger.  After that, only one, if they only have one account.