My son (relatively new to filing his own taxes) just asked if he needed to bother with Schedule D since his only cap gain for all of 2012 was 10 cents as 'cash in lieu' from a stock split a few months ago (I think he has his dividends reinvested and the split didn't like the partial shares). Rounding to the nearest dollar is zero, but is it okay for him to just skip it? I would tend to tell him to ignore it, but he really is trying to be very careful and do everything correctly in the eyes of the IRS.

Thanks!
Anne

My son (relatively new to filing his own taxes) just asked if he needed to bother with Schedule D since his only cap gain for all of 2012 was 10 cents as 'cash in lieu' from a stock split a few months ago (I think he has his dividends reinvested and the split didn't like the partial shares). Rounding to the nearest dollar is zero, but is it okay for him to just skip it? I would tend to tell him to ignore it, but he really is trying to be very careful and do everything correctly in the eyes of the IRS.

Thanks!
Anne

The IRS allows rounding figures to a whole dollar when more than 50 cents, rounding down when
less. 10 cents is a rounding error.

BTW, if it is only a single transaction, how much work is really involved in completing six boxes,
with a brokerage report supplying most of input data?

The $.10 is the amount on the Schedule D, and not his gain?

If it is the amount on Schedule D, it can be ignored. It rounds down to zero.

Let me repeat vkg's question slightly differently.

Is the gain 10 cents? Or is the gross proceeds 10 cents?

There's a big difference between:
1. a transaction with gross proceeds of $20,000.10 and a cost of $20,000.00 and
2. a transaction with gross proceeds of $0.10.

One can be ignored as a rounding error and one almost certainly needs to be reported.

--Peter

Peter, thanks for framing the point more accurately.

I was headed in that direction in my second attempt, but was still not quite capturing the
main concern.

Hohumm777, vkg, ptheland,

Thanks to all for the various wordings of your responses. Upon further quizzing of my son (he lives in a different part of the state), he replied that the gross proceeds were about $20 with the cap gain as $0.10. I told him of your replies and suggested that he go ahead with filing the extra 2 pieces of paper. He's filing by hand and reading all instructions and so on (not using a software program since he wants to read and understand what he's doing). His tax situation is very simple at this point with just salary on a W-2, standard deduction, dividends and interest from various accounts. Thanks again!

Anne