I just did my return on my turbotax. Imported Scottrade's 1099 and imported Proshares' K-1 for AGQ. Result is my tax liability is an obscenely inaccurate figure. Scottrade counts AGQ trading gain and Proshares counts the same trading gain (and other phantom income). WTF! Anyone else have this problem?
Disclosure: I closed out AGQ before the end of the year.
Did anyone ever talk to their accountant about this? I'm getting ready to take all of our paperwork in to file and was wondering if there is anything I can tell ours to help him in case it's something he hasn't dealt with before.
I think I have the answer. Since Brokerage only reports proceeds and not the cost basis, you adjust cost basis on the 1099 to get your actual net gain/loss.
So, if Proshares shows phantom gains on k-1, you don't change anything on k-1 because that's what's reported (flows to Schedule D). On the Schedule D where your brokerage reports proceeds, you increase the cost basis reported by these phantom gains.
Net result is your tax return reflects your actual gain reported by your Brokerage.
I must correct your statement. You said that Brokerage only reports proceeds and not the cost basis. This is no longer true. Starting this tax year 2011 brokerage does report the cost basis on the 1099.