Alternative Investment Fund Reporting Under the New Cost Basis Reporting Regime

March 2013
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Alternative Investment Fund Reporting Under the New Cost Basis Reporting Regime

At a glance

In response to the broker cost basis reporting requirements, the IRS has released a revised Schedule D - Capital Gains and Losses and a new supporting schedule, Form 8949 – Sales and Other Dispositions of Capital Assets for partnerships and corporations for tax year 2012.

This new form is intended to assist the IRS with the reconciliation of a taxpayer's basis records and the amounts of gains and losses being reported with its brokers' records of such amounts. However, it is not expected to be used to reconcile differences that result when a taxpayer and a broker do not agree on the particular lot that has been relieved and so it emphasizes the importance of funds and brokers addressing lot relief methods upfront.