[quote=SK in CV]
IRA distributions aren’t reported on Sched D. Ever.[/quote]
Never said they did, I was giving example of the additional reporting required of brokers – beyond what some people believe.
[quote=SK in CV] IRS requirements for brokerages recently (maybe 4 years ago) increased to require reporting of basis of securities which are sold in non-retirement accounts.[/quote] As of 2011. See the link provided in previous.
[quote=SK in CV]The IRS does not keep the info of your purchases every year. Brokers report the basis (if available) of what you sold every year. This has nothing to do with IRA distributions.[/quote]
Didn’t say the IRS keeps the info on your purchases every year. Again, see the link provided on increased reporting – it mentions reporting basis on sale. Again, prev link search for ‘adjusted’. I didn’t say it did have anything to do with IRA distributions.
[quote=SK in CV]The IRS runs matching programs on all returns, irrespective of income. If income that was reported on 1099’s or W-2’s or other income/deduction reporting isn’t consistent with what was reported on returns, correction letters are issued if the amount is sufficient. They’ve been doing this for decades. This also has nothing to do with recovering non-deductible IRA contributions.[/quote]I think it is a little more than matching .. there is also a ‘plausibility test’ vs changes in deposits etc. They have not been doing this for decades because before about 2010, they did not have the ability to do electronic forms, OCR on paper forms(reliably) etc. Instead they had to do the hand check on specific returns, often chosen on income (higher income, more likely significant amount involved in the error (intentional or otherwise)). The coverage, check has moved down to lower incomes as the years go by because of the available compute power. I came across the boundary in income by watching when the IRS started picking up ‘nits’ on my returns. When my income started approaching $100,000/yr, the IRS started identifying small nits. I don’t know what the IRS would be considering significant enough.
What it has to do with recovering non-deductable IRA contributions has to do with year to year record keeping. You seem to be assuming that the IRS is working with a snapshot of one year only. I am saying that they are not and that they have a multi-year record and records of carrying balances/amounts ie. loss carryover and non-deductable IRA contributions to date. I don’t think the records go back before 2011 for the most part.
