In the past many financial professionals felt that an “estimated” version of cost basis would be acceptable. That was then…this is now! New IRS cost basis legislation effective January 1, 2011 requires investors to show accurate cost basis information to the IRS when reporting any capital gains or losses. Broker dealers and transfer agents are only preparing to provide cost basis information for purchases made after January 1, 2011. However the taxpayer is still responsible for reporting accurate cost basis information for purchases before and after January 2011 when fines and IRS scrutiny will be enforced like never before. This means taxpayers will need a source for accurate historical cost basis information. Using NetBasis, you can be that source. These new cost basis requirements mean your services will be needed and sought after by retail investors as they explore the challenges these requirements represent. Cost basis reporting challenges provide new opportunities for CFPs, CPAs, tax preparers, enrolled agents, wealth managers, and estate attorneys to extend their services and aid retail investors.
NetBasis calculates the most complex historical cost basis scenarios due to stock splits, mergers, spin-offs, wash sales, dividend reinvestments and every other adjustment in seconds. What took hours or days of research and calculation now takes just seconds. NetBasis will allow you to advise your client which security sale method best fits their investment strategy using all of the IRS mandated sale methods. (FIFO, LIFO, HIFO, LOFO, average and specific) Firms that continue to offer an “estimated” version of cost basis, do not offer tax optimization services and refuse to assist their savvy clients in meeting these mandatory cost basis reporting guidelines will risk losing their clients to financial firms that do. Investors are already being courted by tax preparers that promise innovative tax strategies and cost basis reporting compliance. Using NetBasis your firm will gain the competitive edge needed to compete to today’s value driven market.
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