A guide to your 2014 Consolidated IRS Form 1099
A guide to your 2014 Consolidated IRS Form 1099
Disclosure A guide to your 2014 Consolidated IRS Form 1099 Reporting information About this guide This comprehensive reference guide is designed to help you in filing your federal income tax return. It provides detailed explanations and illustrates examples of the statement you may receive, depending on the type of reportable income you have in your account. The Consolidated Form 1099 reflects information that is reported to the IRS. In most situations, you must report the income shown on Form 1099 when filing your taxes. Please note: – Your Consolidated Form 1099 (rather than your December statement) is the official document for tax reporting purposes.
– Various issuers may provide additional information post year-end; therefore amounts shown on your monthly statement(s) may be different from your Consolidated Form(s) 1099. – Attempting to reconcile the December statement against you Consolidated Form 1099 may be difficult, as the figures will likely be different. Disclosure This guide is not intended to be used or relied upon for the purposes of tax advice. As tax laws may be complex and open to interpretation, please consult your tax advisor with any tax questions you may have regarding the preparation and filing of your tax return(s).
Table of contents Important dates and deadlines .
3 What is included on your Consolidated Form 1099 . 4 Enhancements to Forms 1099 . 5 Information not reported to the IRS—New for 2014 . 12 Reporting changes and enhancements to Forms 1099-B . 17 Delayed reporting messages . 19 General information . 20 Structured Products . 25 Additional product specific information . 29 Limited partnerships . 31 State reporting and withholding . 32 Form 1099-DIV, Dividends and Distributions . 33 Form 1099-OID, Original Issue Discount . 35 Form 1099-INT, Interest Income . 38 Form 1099-MISC, Miscellaneous Income . 40 Form 1099-B, Proceeds from Broker and Barter Exchange Transactions .
42 Frequently Asked Questions (FAQ . 48 Useful resources . 51
3 Important dates and deadlines As you prepare for 2014 tax reporting, please note these anticipated mailing dates for UBS forms and information. Form Account type Description Postmarked by Year-End Valuation (YEV) Retirement The December 2014 statement provides the client with the December 31, 2014 value of their IRA. January 7 1099-R Retirement Reports the taxable and non-taxable distributions from IRAs and Qualified Plans for which UBS Financial Services Inc. is the trustee or custodian. January 31 1099-Q Retirement Reports distributions and transfers out from Coverdell Education Savings Accounts (CESAs), for which UBS Financial Services Inc.
is the trustee.
January 31 Year-End Valuation Statement Retirement The form will only be sent to clients holding IRAs for which UBS Financial Services Inc. is the custodian and only in cases where the substitute YEV included in the December monthly statement must be revised due to special situations or securities. January 31 5498-ESA Retirement Reports contributions and transfers into the client Coverdell Education Savings Accounts (CESAs). April 30 5498 Retirement Reports individual and rollover contributions made to IRAs, as well as employer and employee contributions to SEP, CODA SEP, and SIMPLE IRAs.
May 31 1099 Consolidated Statement Retail accounts-First Mailing Includes Forms 1099-DIV, 1099-INT, 1099-OID, 1099-MISC and 1099-B for which we do not anticipate additional updates/corrections from the issuers (generally excludes holders of Mutual Fund and Unit Investment Trust (UIT) companies).
*Please note: Accounts in the same household may receive their individual Form(s) 1099 in either or both of the mailings. February 15 All accounts- Final Original Mailing Includes Form(s) 1099 for all remaining accounts not included in the First Mailing. February 28 Informational Tax Statement (note: not an IRS Form) Retail, exempt from 1099 reporting Informational Tax Statements can be requested for accounts that do not require a Form 1099 (e.g., corporate accounts). These statements are for client use and will not be provided to the IRS.
February 15 480.6A, 480.6B, 480.6C, and 480.6D Retail – 480.6A—Reporting for Puerto Rico residents holding Puerto Rico securities. – 480.6B—Reporting for Puerto Rico residents holding all Puerto Rico equities and bonds that are subject to withholding (PTAX). – 480.6C—Reporting for Non-residents of Puerto Rico who hold in their account Puerto Rico-based securities in which taxes were withheld on gross income. – 480.6D—This form is for Puerto Rico residents who may be subject to the Alternative Minimum Tax. This form reports interest earned from exempt PR mortgage-backed or collateralized mortgage obligations.
February 28 Corrected Forms 1099 Retail Includes any late reclassifications of income or capital gain income, updates made to SSN/TIN and cost basis updates that are made for accounts that have received an original form in the first mailing.
February 28 2439 Retail Notice to Shareholders of undistributed long-term capital gains and taxes paid by regulated investment companies. March 15 REMIC Statement Retail This is a separately mailed statement which will show income reporting, on accrual basis and by tax lot, for certain investments in debt obligations, e.g., Real Estate Mortgage Investment Conduits (REMICS), Collateralized Mortgage Obligations (CMOs) and Collateralized Debt Obligations (CDOs ). March 15 K-1 (Limited Partnership Income) Retail Distributed by and from the Limited Partnership (LP). Note: Because Forms K-1 are processed and mailed by LPs directly, UBS Financial Services Inc.
cannot control mail dates, which may vary. Various
4 What is included on your Consolidated Form 1099 Your Consolidated Form 1099 reflects tax reporting information that UBS Financial Services Inc. (UBS) provides to you and to the Internal Revenue Service (IRS) on: – Form 1099-B – Form 1099-DIV – Form 1099-INT – Form 1099-OID – Form 1099-MISC Your Consolidated Form1099 shows all forms regardless of your specific tax reporting situation; those forms that are not applicable to your particular circumstance will show zeroes. UBS reports all payments, distributions and original issue discount (OID) to the IRS and to you. We also must report the gross proceeds on certain sales transactions, and the cost basis of covered securities.
For your protection, this form may show only the last four digits of your Social Security number (SSN), individual taxpayer identification number (ITIN), or adoption taxpayer identification number (ATIN). However, UBS has reported your complete identification number to the IRS and, where applicable, to state and/or local governments. In addition to the information provided to the IRS, certain states require that additional tax information be reported directly to them by UBS for residents of those states. Refer to the “State Reporting and Withholding” section on page 34 for further information regarding these special reporting requirements.
Important note: Your Consolidated Form 1099 (rather than your December statement) is the official document for tax reporting purposes.
5 Enhancements to Forms 1099 2014 Consolidated Form 1099 Summary Page As the result of the newly-required IRS reporting regulation changes, we have changed the Consolidated Form 1099 and made several enhancements to the Consolidated Statement to provide you with the most consistent and detailed view of your Forms 1099. This guide will help you identify the various tax year 2014 form changes. The first two pages of the Consolidated Form 1099 statement now contain the summary level information for the various Form(s) 1099.
The first Summary Information page of the consolidated statement contains aggregate amounts of income (1099-DIV, 1099-MISC, 1099-B for Regulated Futures Contracts), as well as the Summary of sales transactions (proceeds, gains, losses, adjustments and withholding). Snapshot of Summary Information Page 1
6 Summary Information page 2 of the consolidated statement provides: aggregate amounts of income (1099-INT), Original Issue Discount Summary, State Tax Withheld, Income Adjustment, Currency and Other Activity section, Adjustments to Interest and Original Issue Discount (OID), and Non Reported Income, Fees, Expenses, and Expenditures.
Snapshot of Summary Information Page 2
7 Form 1099-DIV The 1099-DIV reporting information for tax year 2014 remains the same; therefore the summary of the 1099-DIV has not changed. The Detail for Dividends and Distributions section has been enhanced to identify the country code for instances of foreign tax withholding. The foreign tax withholding has been summarized in the “Foreign Income and Taxes Summary.” Please see the Foreign Income and Taxes Summary section of this guide on page 15 for additional information. Snapshot Form 1099-MISC Changes for this year include: 1. Eliminating the following boxes per IRS guidance: – Box 11 – Foreign tax paid – Box 12 – Foreign country or U.S.
Possession (to which the foreign tax was paid) 2. Box 2 – Royalties will include the total amount of royalty income paid to your account. This box will also include rental income that you earned from real estate activities and any surface royalties generated from strip mining and other activities.
8 Form 1099-B New reporting requirement for Section 1256 Options as shown in Regulated Futures Contracts: Starting in tax year 2014, Section 1256 Options are now required to be reported. See “Reporting Changes and Enhancements to Forms 1099-B” section of this guide for detailed information on this new regulatory requirement. Box numbers and the years contained in the line item descriptions have changed to coincide with the official form: – Box 8 – Profit or (loss) realized in 2014 on closed contracts – Box 9 – Unrealized profit or (loss) on open contracts – 12/31/2013 – Box 10 – Unrealized profit or (loss) on open contracts – 12/31/2014 – Box 11 – Aggregate profit or (loss) on contracts The below snapshot shows the 1099-B (Regulated Futures Contracts) for tax year 2014: Summary of Sales Transactions This section was previously shown on the Consolidated Form 1099 after the Proceeds from Broker and Barter Transactions Details Reported on Form 1099-B.
This summary of proceeds, gains, losses, adjustments and withholding is now showing on the first Summary Information page. This section is grouped according to the definitions on IRS Form 8949. It was initially introduced with the cost basis reporting requirements and continues to evolve as new requirements become effective. A new column has been added to this section “Market Discount.” Details of this column can be found on page 20, under the “Adjustments & Code(s), if any” column. Amounts in this column represent the portion of sale proceeds that is to be treated as ordinary income when a position is sold.
9 Form 1099-INT Two additional boxes have been added to Form 1099-INT per IRS guidance: – Box 10 -Market Discount – Box 11 -Bond Premium For covered tax lots, any amount of accrued market discount (currently recognized if client elects) or amortized bond premium (currently recognized unless client elects not to) must be reported in the new boxes added to the form for 2014. Although the IRS did not create distinct boxes for bond premiums on different types of securities, we have enhanced the form to include four unnumbered lines that show bond premium arising from: Non-Treasury obligations, U.S.
Treasury obligations, Tax-exempt obligations and Tax-exempt private activity obligations. What is Market Discount? Market Discount is the excess of a bond’s stated redemption price at maturity over its purchase price, assuming no Original Issue Discount (OID).
What is Bond Premium? Bond Premium is generally the excess of the purchase price of the bond over its stated redemption price at maturity. Tax-Exempt OID and Bond Premium Display Form 1099-OID has provisions for reporting market discount and acquisition premium; however bond premium is not shown on Form 1099-OID. If there is bond premium on a taxable OID bond, the detail will be shown within the interest detail and summarized on Form 1099-INT (for covered tax lots). Although the IRS does not require us to report tax-exempt OID, for your convenience we have included the noncovered tax lots in the new summary of “Adjustments to Interest and OID” section.
The “Adjustments to Interest and OID” is detailed in the Information Not Reported to the IRS section of this guide.
10 Form 1099-OID Two boxes have been eliminated per IRS guidance: – Box 11 – Foreign tax paid – Box 12 – Foreign country or U.S. Possession (to which the foreign tax was paid) Two additional boxes have been added to Form 1099-OID per IRS guidance: – Box 5 -Market Discount and – Box 6 -Acquisition Premium – To make this box more user-friendly, we have identified Treasury and non-Treasury obligations separately. What is Market Discount? Market Discount is the excess of the issue price of the bond, plus accreted OID over the purchase price. For a covered security, if you made an election under section 1278(b) to include market discount in income as it accrues and you notified your payer of the election, Box 5 shows the market discount that accrued on the debt instrument during the year you held it.
What is Acquisition Premium? Acquisition Premium is the excess of a debt instrument’s adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument’s adjusted issue price at that time. For a covered security, Box 6 shows the amount of acquisition premium amortization for the year that reduces the amount of OID that is included as interest on your income tax return. Snapshot of Summary Page Snapshot of Detail Page
11 State Withholding – New for 2014 Any amount of state backup withholding on the various types of income has now been added to a newly added section of the statement “State Tax Withheld.” The detailed state reporting section of the statement contains the originating form, jurisdiction and state ID.
The details will appear in the income details (transaction level), the summary level (Summary Information page 2) and the statement’s state tax detail section (totals by state and form). Income Details Snapshot State Tax Summary Snapshot State Tax Detail Section Snapshot
12 Information not reported to the IRS— New for 2014 For your convenience, we have included several new sections that provide you with additional information that may be helpful when filing your tax return. We have also made layout changes to some of the sections that may be useful for filing your tax return. Adjustments to Interest and Original Issue Discount: This new section is included on Summary Information page 2. It provides information such as accrued interest paid, as well as other additional adjustments to income on noncovered fixed income holdings. Non Reported Income Fees, Expenses, and Expenditures: This new section is included on the Summary Information page 2.
It provides information such as Other Receipts, Expenses, Opening Transactions (Options), Fees and Payments Received and Income and Adjustments. The details for these line items are provided within the statement and are grouped under these five sections: Other Receipts, Expenses, Opening Transactions, Fees and Payments Received, and Adjustments.