Client received a corrected 2015 1099 that reduced the capital gain distributions by $5,000. Client had no taxable income for 2015, so the only affect is the capital loss carryover. File 1040x? or just adjust the carryover on 2016?
Thanks!
WEISSEA wrote:How does the IRS computer know the mismatch has no affect on tax balance. You could file a simple 1040X, or you could wait around a couple of years to see if you get a mismatch notice and respond to the notice then. I would do the 1040X in a slow period becasue its a few minute job and possibly might help the IRS improve their corrected 1099 procedure(e.g. allow e filed 1040X like they do for entities).
Instructions for Form 1040X wrote:You are only changing information. If you aren’t changing
any dollar amounts you originally reported, but are changing
information, do the following.
- • Check the box for the calendar year or enter the other
calendar or fiscal year you are amending.- • Complete name, current address, and SSN.
- • Complete Part I, Exemptions, on page 2, if you are changing
your exemption information that doesn’t change any dollar
amounts.- • Check a box in Part II, if applicable, for the Presidential
Election Campaign Fund.- Complete Part III, Explanation of changes.
MSchmahl wrote:I would guess that it likely reduces the chance of being audited in the first place. Which seems more likely to catch an examiner's (or computer's) eye?
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