Members of the Maryland Association of Certified Public...

Tax answers

March 12, 1996

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: What do you do if you receive a Form 1099-B from a bank reporting income to the IRS that you have no idea what it's for and you can't get any clarification from the bank?

A: First, try calling the bank and ask to speak to a manager, supervisor or other bank official to explain the problem again. Follow up with a written explanation of the facts to the bank and request a corrected Form 1099-B, retaining copies of both for your files. If the bank refuses to cooperate and you are certain the 1099 is in error, you should contact the Internal Revenue Service, which will notify your bank of the incorrect form and send you a copy of a completed Form 4598, Form W-2 or 1099 Not Received or Incorrect. If you still haven't received a corrected 1099 by the filing deadline, the correct amount should be reported on your return and a copy of Form 4598 attached.

Q: If you have a capital gain or loss on a stock sale, how do you figure out what the buy price was since the stock has split since you purchased it? What is the initial buy price you use after the split?

A: The new buy price (cost basis) would be your total cost (purchase price plus the commissions and other costs relating to the purchase) for the shares purchased divided by the total number of shares existing after the split. You would then multiply your cost basis per share times the number of shares currently being sold.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

A joint service from The Sun and the Maryland Association of Certified Public Accountants can help you with your tax queries. Association members, all CPAs, will answer questions from readers until April 15. To ask a tax question, call Sundial, The Sun's telephone information service, at (410) 783-1800. Using a touch-tone phone, enter 6225 after you hear the greeting.

Callers are asked to leave their names and phone numbers, should questions need to be clarified. Selected questions will be answered in the Business section. No questions will be answered by phone. Names and numbers will not be published.

Pub Date: 3/12/96

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