(2021 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.
Axos Advisor Services Tax Information
2021 Forms 1099-R will be mailed and available online January 31, 2022
Letters for account owners requiring RMDs will be mailed on January 31, 2022
Form 5498 (IRA, SEP, SIMPLE, or Roth Contribution/Distribution/Rollover/Valuation Reports will be mailed on May 31, 2022
Note: For account owners active BEFORE August 2, 2021, you should receive two of each form. one for E*Trade Advisor Services and one for Axos Advisor Services. They should arrive in the same envelope. Combined tax forms will be posted in Liberty in one PDF.
All non-retirement account tax forms will be mailed and available online February 15, 2021.
For detailed information on what is included on each form, click here
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 (capital gain/loss), a fee statement, if applicable and a reference sheet titled 1099 Reporting Information for 2021.
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.
Axos & SEM strongly recommend clients delay the filing of taxes until the last half of March due to this possibility
• For mutual funds and ETFs, Axos 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 Axos 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, Axos Advisor Services Account owners can import their tax information from the Liberty platform to TurboTax or H&R Block. Account owners using TurboTax or H&R Block will be able to select “Axos Advisor Services” from a list of financial institutions from which they can import their tax information. After selecting “Axos Advisor Services”, account owners will need to authenticate their identity using their Liberty login and password in order to begin importing their tax information. Please make sure that account owners have their user login password already established. If they need assistance logging in to Liberty, account owners can email AASfirstname.lastname@example.org. Your Axos Advisor Services Relationship Manager will let you know so you can assist the account owner and explain how they can reset their password. If account owners need assistance importing data from Axos Advisor Services to TurboTax or H&R Block, they can contact the Help Center, Live Community or live chat and phone support for either Turbo Tax or H&R Block. Note: It is not possible to select “Axos Advisor Services” as a financial institution in the free version of TurboTax.
For accounts open prior to August 2, 2021, you will have to repeat the above procedure for E*Trade Advisor Services.
If account owners need assistance importing data from Axos into TurboTax, they are asked to contact TurboTax through the in-product Help Center, Live Community or Live Chat and Phone Support.
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 Axos' 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
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At the end of January, Axos Advisor Services sends 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. Axos will include a form to establish or change systematic RMDs.
[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.]
If you utilized a Qualified Charitable Distribution (QCD) to fulfill your RMD, please note it is up to you to properly report this on your tax form. Here is the guidance from the IRS:
How do I report a qualified charitable distribution on my income tax return?
To report a qualified charitable distribution on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter "QCD" next to this line. See the Form 1040 instructions for additional information.
You must also file Form 8606, Nondeductible IRAs, if:
- you made the qualified charitable distribution from a traditional IRA in which you had basis and received a distribution from the IRA during the same year, other than the qualified charitable distribution; or
- the qualified charitable distribution was made from a Roth IRA.
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.
Please note that any RMD requests received after December 10 will be processed on a best efforts basis.