IRS Guidance on Basis Reporting by Brokers Recognizes Complexity of Different Securities

The Internal Revenue Service unveiled April 17 final rules and temporary rules (T.D. 9616) implementing legislation on how brokers must report basis to the government when they sell securities, providing for reporting in phases depending on complexity.

Reporting for less complex debt instruments must begin Jan. 1, 2014, while reporting for more complex instruments must begin Jan. 1, 2016, IRS said. The agency also noted that it is excepting short-term debt instruments from reporting altogether.

IRS also issued proposed (REG-154563-12) and temporary rules requiring brokers to report interest income in a way that reflects bond premium ...