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One of my 1099-DIVs indicates a special dividend that I received from a European company. It indicates that its a LTGC in box 2a instead of a qualified dividend. No tax rate difference, perhaps, but I'd rather get it right. Also it could make a tax difference due to canceling out with capital losses, or not doing so. Broker says they'll look into it, and I'm not the only one who has questioned it.

The other 1099-DIV indicates some short term capital gain distribution as qualified dividends by including them in both boxes 1a and 1b. Different tax rate, that's not right.

Not that I'm a rush to file because I'll owe some this year (as was the plan), but I still like to get all the paperwork out of the way, so its not hanging over me.

< sigh > oh well
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I complain about this here every year. I have been finding errors on my 1099's almost every year for several years. While it is true that I sometimes invest in some funky companies, it is very frustrating. Ever since the rule allowing qualified dividends, I have seen problems, though some problems are not specifically related to that.

As I mentioned, I kept receiving amended 1099's from Ameritrade until March 22 last year. Not much hope of finishing my taxes early (and accurately) in that case. It is lucky that I waited until the last minute or I would have had to file an amended return.

If it isn't too much of a PITA, you might track down all of that info yourself -- figure out which companies paid you dividends, and contact them (or look at their web site) to figure out the tax treatment. Of course, there is a chance that it will be incorrectly reported on the 1099's, and never corrected, in which case you'll have to amend your returns anyway, because the IRS will want you to match the 1099's even if they're incorrect.

Randy
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If it isn't too much of a PITA, you might track down all of that info yourself -- figure out which companies paid you dividends, and contact them (or look at their web site) to figure out the tax treatment.

I basically already did that. I confirmed all the numbers on the 1099, maybe I'm just a little OCD, but I want to make sure its right. Its all correct, sans these two things. I mean, I didn't go through every company I own and confirm that the dividends are qualified, but considering they're all US companies on US exchanges (other than that one), I'll just take their word for it.


Of course, there is a chance that it will be incorrectly reported on the 1099's, and never corrected, in which case you'll have to amend your returns anyway, because the IRS will want you to match the 1099's even if they're incorrect.

This brings up an interesting question. If either of the broker won't correct their 1099s, and I'm sure they're incorrect, what would happen if I filed with what I was sure was correct. I'm sure I'd get a letter, but could I just reply with my thoughts and may they accept them?

In this case, actually, there would be no additional tax due. The difference between qual div & LTCG dist is nothing (I would have a net LTCG even without this, so adding a little more indeed keeps the 15% rate). And in the case of the STCG being called a qual dividend, my report would actually lead to higher taxes than the 1099. So perhaps the IRS wouldn't even inquire?


I guess I'll do my 1099-B tonight, which is correct as far as I know (though missing a fractional share sale), which I'll just add - that's not worth fighting.

Any thoughts on what to do, if, hypothetically, the 1099s aren't corrected?
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Of course, there is a chance that it will be incorrectly reported on the 1099's, and never corrected, in which case you'll have to amend your returns anyway, because the IRS will want you to match the 1099's even if they're incorrect.

I'm going to disagree with this. You are not required to match the 1099s, especially if the 1099s are incorrect.

It is true that the computerized matching process will generate an inquiry (NOT an audit) if your return does not match the 1099s. But then you present your information showing the 1099 was wrong and you go on your merry way.

Assuming you have done your homework and can show to the IRS's satisfaction that your return was correct and the 1099 wrong, you will have no problems.

--Peter
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If it isn't too much of a PITA, you might track down all of that info yourself -- figure out which companies paid you dividends, and contact them (or look at their web site) to figure out the tax treatment. Of course, there is a chance that it will be incorrectly reported on the 1099's, and never corrected, in which case you'll have to amend your returns anyway, because the IRS will want you to match the 1099's even if they're incorrect.

I woudl NEVER change my tax return to match the 1099 when the 1099 was in error. Submit a correct return and retain good notes which explain the discrepancy. If/When the IRS comes calling, give the documentation and they will go away.

Ira
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