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Update on the IRS Form 8949

What you need to know

As a follow-up to the recent alert issued on Form 8949: Sales and other dispositions of capital assets on March 1, 2013, the IRS released updated instructions on Form 8949 on April 11, 2013. According to the IRS, taxpayers may enter summary totals instead of reporting the details of each transaction on a separate row of Part I or Part II or on attached statements if they meet the below requirements:

  1. Taxpayers report more than five transactions for that Part, and
  2. Taxpayers 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, the taxpayer may enter the summary totals on line 1 or line 3 with the correct box checked. Taxpayers should enter "available upon request" in column (a), leave columns (b) and (c) blank and enter "M" in column (f). If other codes also apply, enter all of them in column (f). Taxpayers should not use a separate row for the totals from each broker, instead, they may enter the summary totals from all brokers on a single row of Part I or Part II with the appropriate box checked.

The new reporting requirements may take a substantial amount of effort for taxpayers not qualifying for the exceptions to accurately complete and will likely require close coordination between fund managers and their tax advisors.

For additional information or questions, please contact:

Ted Dougherty
National Managing Partner, Asset Management Tax
Deloitte Tax LLP
+1 212 436 2165

This alert contains general information only and Deloitte is not, by means of this alert, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This alert is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this alert.

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