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hi all,

background: i live abroad, and participate in my employer's espp through my foreign bank. recently, banks in our country (israel) started reporting to the irs, so for the first time this year i received a 1099-div from this bank.

on the statement i recently received from my bank (not the 1099-div), the cost basis of the stock is way off - it is too low by a factor of 100. i've reported this, but they work very slowly - it could be months or years before they sort it out.

now to my question: if i sell stock (i have only ever bought), does the bank report the cost basis on some form to the irs? if so, then it seems that i shouldn't sell before i get the bank's records corrected - is this right? or is it ok to claim the correct basis on my returns if i know i am right (i have the documentation to prove it).

thanks in advance for your help,

c.
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...now to my question: if i sell stock (i have only ever bought), does the bank report the cost basis on some form to the irs? if so, then it seems that i shouldn't sell before i get the bank's records corrected - is this right? or is it ok to claim the correct basis on my returns if i know i am right (i have the documentation to prove it).

When you sell stock, only the sales proceeds are reported to the IRSby the broker/bank. The IRS assumes the full amount is taxable income until you provide your original cost basis and calculate your gain or loss on Schedule D. It is your obligation to maintain the documentation to support the cost basis you use.

Ira
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ira,

great. thanks for the info.

c.
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