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Tax Planning/Long Term Capital Loss Reporting


In the year 2000, I purchased 95 shares of common stock through at an average value of $43/share. It was my first venture into speculating in the stock market. It turned out to be a 'dog', at times sinking to half of what I paid. I finally sold it all in 2011 at $41/share, the nearest it came to my original purchase price in all those years. Disgusted with the stock performance and loss, I didn't even claim it on my 2011 tax return. I just wanted to wash my hands of the whole thing, loss and all.

A couple weeks ago I received a letter from the IRS stating I owe
$616 on $3877 based on a 1099 sent them by E-Trade. I contacted E-Trade asking how I can access (on-line) stock purchase prices made over 10 yrs ago in order to prove to the IRS it was sold as a loss. E-Trade replied they don't maintain records over 7 years!

I searched high and low for a statement of purchase E-Trade would send before they went 'paperless'......100% electronic. No such luck. If I had it, it must have been discarded years ago. However, I had made some handwritten entries in a notebook showing what stock was purchased, the date of purchase, share value at that time, and commission costs.

My question is this: Would I need more evidence than this in my reply to the IRS? I would also certify by statement and signature it is factual.

Thank you in advance for any advice you may offer.

I usually get old stock prices at Big, there are probably other sites too that supply that kind of info. The IRS, until recently, didn't do much on tracking stock trades. So they have no idea what you bought the stock for and think all of your selling price is profit based on that 1099. I would put in a partial amended return for 2011 and include the stock info/form you left out. The evidence you have is fine - mostly you didn't take care of the 1099 in your tax return, IRS doesn't like income without information - that in your case would have shown a loss.  

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Richard S


My expertise is in collecting past due taxes and tax returns. While at the IRS I worked on wage and bank levies, liens, Offer in Compromise, late filing and payment agreements every day. I spoke with over 20,000 people concerning their issues while I worked there (just retired).


Ten years working for the the IRS in Collections and tax return review. Worked with over 20,000 people on their IRS issues. Explained their options and usually worked out a solution while they were on the phone.

Masters Degree from Iowa State in Ames.

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