Question

I transferred stock brokers - how to account for and adjust cost basis that may be counted twice?

Forum|Forum|4 years ago
March 29, 2022
2 replies
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Early last year I switched stock brokers and transferred my remaining positions to my new broker. Both of my 1099B from both brokers total the cost basis for the same shares. Both 1099 were uploaded to TurboTax and automatically filled in the designated fields. How do I adjust for this, or do I even need to? I believe with the way it is now, I may be paying less taxes than I'm supposed to, but I'm not sure how to adjust for it as I don't really have a way of knowing the exact number of shares of the stocks that were transferred.

TurboTax Home & Biz Windows

VolvoGirl

Employee

Did they just transfer the actual shares or did they sell them and the new place buy them? Then the new broker should have a different cost basis.

D

DavidD66

The only thing that should be on your Form 1099-B are sales transactions that were facilitate by the broker/dealer issuing the Form. If your held stock at broker A, and sold 100 shares of XYZ stock, that would be reported by broker A. If shortly after selling 100 share of XYZ you moved your account to broker B, broker B would not have any record of your sale of XYZ shares and would not report it. Similarly, stock you transferred from Broker A to Broker B and subsequently sold would only be reported by Broker B. Broker A would have no record of that sale and would not report it on your 1099-B.

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A

Andrew61162Author

I understand that Broker B won't report sales at Broker A and vice versa, but my concern pertains to the "gross proceeds" section total. This tallies my total investment in Broker A, and then carries it over to Broker B with the shares that I transferred, which now shows that same gross, PLUS whatever I traded afterwards, thus counting some of it twice. This now shows nearly double (but not exactly, due to trades done on Broker A AFTER the transfer, and trades done on Broker B after the transfer as well, where the gross would continue to climb in each case). My question comes down to, does this matter? Cost basis from a sale at Broker B (from the transfer of Broker A) seems to show the correct amount from when I purchased it with Broker A

To further break it down, say I have roughly $150,000 gross portfolio value at Broker A at time of transfer. Broker B receives my portfolio and now shows $150,000 gross value. Fast forward to receiving my 1099B from BOTH brokers tally that same $150,000 (plus whatever trades I made after) in the "Gross Proceeds" section. TurboTax added these and is now showing nearly $400,000 in gross proceeds, when it should be roughly half. This is my concern.