(2020 Data updated! Let us know if you'd like a hard copy for your desk)
Check back here for the latest tax reporting updates from E*Trade Advisor Services (ETAS)
NOTICE: SEM Wealth Management does not provide tax advice. All information on this page is for informational purposes only. Clients are advised to seek advice from a tax professional prior to acting on this information.
E*TRADE Advisor Services (ETAS) Tax Information
All non-retirement account tax forms will be mailed and available online on February 15, 2020.
DO NOT MAKE YOUR TAX APPOINTMENT PRIOR TO THIS DATE!
Non-retirement tax forms being mailed include Forms 1099-B, 1099-DIV, 1099-INT, 1099-MISC, and 1099-OID (as applicable), their associated detailed reports, a fee statement, if applicable and a reference sheet titled 1099 Reporting Information for 2019.
Reallocated Dividend Payments – If your clients hold a mutual fund, ETF, or Real Estate Investment Trust (REIT) in their portfolio, there is a high probability a portion of the dividend payments made throughout the year will be reallocated for tax reporting purposes. As a result, tax forms may not match the account owner’s fourth quarter statement. Due to late reallocation notices, some account owners will receive a corrected tax form.
ETAS & SEM strongly recommend clients delay the filing of taxes until March due to this possibility
• For mutual funds and ETFs, ETAS will begin receiving reallocation information in early January. In most cases, the new information is processed in time for the original tax form mailing. Note: If the information is received after the tax forms process begins, a corrected tax form will be sent.
• For REITs and Mutual Funds that hold REITs, the reallocation information is typically not received by ETAS in time for the original tax form mailing due to the complex accounting necessary for REITs. Clients holding REITs should look for a corrected tax form sometime in March.
For more information, click the links below:
Finding Total Fees Paid in ETAS Accounts
The 2017 Tax Cut & Jobs Act eliminates the deduction for investment management fees beginning in 2018.
Automatic Imports into Tax Software
When tax forms are available, E*Trade Advisor Services (ETAS) account owners can import their tax data to TurboTax & H&R Block from Liberty. When account owners use the TurboTax software for their tax filing, they will be able to select Trust Company of America from a list of financial institutions from which tax data is imported. For H&R Block the client will need to search for "Trust Company of America" rather than selecting ETAS from a menus. The tax payer’s current Liberty login and password will be used as authentication of their identity and ability to import account tax data.
Please ensure that account owners have their login and password already established. NOTE: Each account will need to log-in to download the forms, even if they have established a statement family and single account login. If they need assistance logging in, account owners are provided the following email address email@example.com. ETAS will then provide this information to the investment advisor, to further assist the account owner. If account owners need assistance importing data from ETAS into TurboTax, they are asked to contact TurboTax through the in-product Help Center, Live Community or Live Chat and Phone Support.
Note: Selecting Trust Company of America from a list of financial institutions is available on all versions of TurboTax except their free version which is available on their website.
TD Ameritrade has the capability to automatically pull information into tax software programs. At this time Turbo Tax and H&R Block are certified for these automatic imports. The information can be pulled by simply entering the Custodian, Account Number, and Document ID (found on the upper right hand corner of page 1 of Form 1099).
While Turbo Tax and H&R Block are the only "certified" programs, any program that has an OFX data feed should work.
Explanation of Wash Sales on 1099s
Since 2012 "Wash Sales" and an entry of "Wash Sale Loss Disallowed" is shown on page 1 of the 1099. This does not mean the entire loss is disallowed, but merely deferred until they can be realized at a later date (typically by not repurchasing the same security for more than 30 days). At that time the cost basis of the shares is adjusted to essentially "realize the loss". During the last month of the year, Strategic Equity does everything possible to minimize any Wash Sale adjustments by purchasing different securities where losses were recently realized. The most difficult program to manage this in is Absolute Return Allocator. Our current procedure allows us to only have disallowed (deferred) losses during the month of December. Those losses will be able to be realized early in the following year.
Here is the explanation of Wash Sale Adjustments from TD Ameritrade:
What's a 'wash sale'?
The IRS created the wash sale rule under Section 1091 to prevent investors from recognizing "artificial" losses by selling a stock for a loss, and then repurchasing the stock within a short period of time. The wash sale "window" starts 30 days prior to the sale, includes the date of sale, and ends 30 days after the sale - for a total of 61 days. If an investor sells the stock at a loss, and then repurchases the same stock within this 61-day window, the loss is deferred until the replacement shares are sold. The pro rata loss is added to the cost basis of the replacement shares purchased, and the holding period of the replacement shares includes the holding period of the original shares sold. However, the deferred loss will eventually be recognized when the replacement shares are sold. Note: Wash Sales can be avoided by waiting to repurchase replacement shares until after the 30-day window closes. Wash sales are automatically tracked and updated in the TD AmeritradeGain Loss reports. Loss is deferred and added to the cost basis of the replacement shares, reducing Realized G/L and increasing Unrealized G/L. The opposite occurs when the replacement shares are sold and wash sales are reversed.
Client Access to Tax Information
Clients & Advisors can view all of their clients' tax information via E*Trade's Liberty Portal. To view your tax documents, go to "About your account", then "Tax Documents" and then click on the appropriate link to download the form.
IRS Schedule D & Form 8949
Many accountants have insisted that each individual transaction must be listed on From 8949. According to the IRS, a summary containing the same information can be attached with the summary totals listed on the schedule. For 2011, the summary would be the SEM Realized Gain/Loss Supplement. For 2012 and beyond, the 1099 will include the summary. Here is the wording from the IRS Schedule D Instructions:
Instead of reporting each of your transactions on a separate row of Part I or Part II, you can report them on an attached statement containing all the same information as Parts I and II and in a similar format (i.e., description of property, dates of acquisition and disposition, proceeds, basis, adjustment and code(s), and gain or (loss)). Use as many attached statements as you need. Enter the combined totals from all your attached statements on Parts I and II with the appropriate box checked.
For example, report on Part I with box B checked all short-term gains and losses from transactions your broker reported to you on a statement showing basis was not reported to the IRS. Enter the name of the broker followed by the words “see attached statement” in column (a). Leave columns (b) and (c) blank. Enter “M” in column (f). If other codes also apply, enter all of them in column (f). Enter the totals that apply in columns (d), (e), (g), and (h). If you have statements from more than one broker, report the totals from each broker on a separate row.
Do not enter “Available upon request” and summary totals in lieu of reporting the details of each transaction on Part I or II or attached statements.
You may enter summary totals instead of reporting the details of each transaction on a separate row of Part I or II or on attached statements if:
You must report more than five transactions for that Part, and
You file Form 1120S, 1065, or 1065-B or are a taxpayer exempt from receiving Form 1099-B, such as a corporation or exempt organization, under Regulations section 1.6045-1(c)(3)(i)(B).
If this exception applies to you, enter the summary totals on line 1. For short-term transactions, check box C at the top of Part I even if the summary totals include transactions described in the text for box A or B. For long-term transactions, check box F at the top of Part II even if the summary totals include transactions described in the text for box D or E. Enter “Available upon request” in column (a). Leave columns (b) and (c) blank. Enter “M” in column (f). If other codes also apply, enter all of them in column (f). Enter the totals that apply in columns (d), (e), (g), and (h).
Do not use a separate row for the totals from each broker. Instead, enter the summary totals from all brokers on a single row of Part I (with box C checked) or Part II (with box F checked).
Form 8949 is not required for certain transactions. You may be able to aggregate those transactions and report them directly on either line 1a (for short-term transactions) or line 8a (for long-term transactions) of Schedule D. This option applies only to transactions (other than sales of collectibles) for which:
You received a Form 1099-B (or substitute statement) that shows basis was reported to the IRS and does not show a nondeductible wash sale loss in box 5, and
You do not need to make any adjustments to the basis or type of gain or loss (short-term or long-term) reported on Form 1099-B (or substitute statement), or to your gain or loss.
If you choose to report these transactions directly on Schedule D, you do not need to include them on Form 8949 and do not need to attach a statement. For more information, see the Schedule D instructions.
If you qualify to use Exception 3 and also qualify to use Exception 1 or Exception 2, you can use both (Exception 3 plus either Exception 1 or Exception 2). Report the transactions that qualify for Exception 3 directly on either line 1a or 8a of Schedule D, whichever applies. Report the rest of your transactions as explained in Exception 1 or Exception 2, whichever applies.
E-file. If you e-file your return but choose not to report each transaction on a separate row on the electronic return, you must either (a) include Form 8949 as a PDF attachment to your return or (b) attach Form 8949 to Form 8453 (or the appropriate form in the Form 8453 series) and mail the forms to the IRS. You can attach one or more statements containing all the same information as Form 8949, instead of attaching Form 8949, if the statements are in a format similar to Form 8949.
However, this does not apply to transactions that qualify for Exception 2 or Exception 3. In those cases, neither an attachment, a statement, nor Form 8453 is required.
Required Minimum Distributions
Click here for some alternative giving strategies
On January 31, 2018, E*Trade Advisor Services will send notification letters and forms to all RMD eligible account holders. This is a required mailing. If a client already has established systematic RMDs and wishes to remain with the same schedule no further action is required. ETAS will include a form to establish or change systematic RMDs. Click here for a copy of the letter and form that will be sent.
[Investment professionals can create an RMD Report in Liberty under the "Documents" tab. Clients & advisors can view individual account RMD information in Liberty under the "Account Details" tab and then clicking on the Retirement Account Information section.]
During the month of January, TD Ameritrade notifies clients who have IRA and/or Qualified Retirement Plan accounts and who turn 70½ this year, or who are already 70½, that they are required to take a required minimum distribution (RMD). In addition, TDA informed them that they can provide their RMD calculation upon request.
Any distributions (or contributions) to an IRA account at TD Ameritrade (TDA), are shown on page 2 of the client monthly statement. Data shown includes total amount withdrawn and any federal or state tax withholding. If RMD is not satisfied per TDA's calculation, an additional disclosure is provided on the last page of the statement. TD Ameritrade's notices do not use the IRS Joint Life Table for spousal beneficiaries >10 years younger (which generally results in a lower RMD). It is up to each client to ensure withdrawals taken satisfy the annual Required Minimum Distribution. Please check with your tax advisor for additional information.
Keep in mind TDA's notices are provided for IRA and/or Qualified Retirement Plan accounts only. The notices do not cover Beneficiary IRA's (also known as Inherited IRA's) as the rules regarding these types of accounts vary. Please contact with your tax advisor with any questions regarding Beneficiary IRA required distributions.
Investment Professionals can view (and export) a full list of their clients under the VEO tabs [Accounts] [Consolidated View] [RMD]. There is also IRS calculation information on SEM's website.
Be aware TDA calculations for Inherited IRA's are not available on VEO, but an email can be sent to SEM for calculation. Same for situations where spouse bene's are >10 years younger. VEO calculation does not use the special calculation on these, they must be requested separately.
[Investment Professionals: For your convenience, you can find a sample of this communication on TD Ameritrade's website under Tax Communication Center. You can also reach it by going to the "Tax Center" (under the Resource Center Tab) and selecting "Tax Communication Center." The communication states that if clients have any questions, they should seek advice from you or from their tax-planning professional.
Please keep in mind that if your clients do not take their RMD when required, the IRS may impose a 50% penalty on the amount not distributed.
You can obtain a list of your impacted clients through both the single account view and the consolidated view on Veo. If you have any questions, please contact your Service Team. For more information on Required Minimum Distributions, click here.]
Please note that any RMD requests received after December 10 will be processed on a best efforts basis.