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So my concern is that I will be switching from claiming these expenses on my schedule A in 2011 to claiming them directly as part of the income on Schedule D in 2012.

You're assigning way too much thought process to the IRS here. I don't think they do all that much automated comparing of one year to the next. If that happens, it's auditors that will do the comparing after a return has been selected for an audit. And even then, it mainly to assist them in deciding what to look at in the audit.

I'm curious you would advise filing a 1099B in this situation?

Well, a corporation that regularly redeems its own stock is considered to be a broker (see the 1099-B instructions). Rather than get into an argument with the IRS over whether the corporation regularly redeems its own stock, I'd just suggest filing the 1099-B. It's way less time and cost than dealing with any question the IRS might have.

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