Tax Preparation AlertTax Preparation Alert
For perhaps the first time in tax preparation history, traditional and Roth individual retirement accounts (IRAs) must be screened for so-called wash sales thanks to Revenue Ruling 2008-5, Internal Revenue Bulletin 2008-3. The ruling has no effective date. Practitioners can accomplish this screening by including a question on a tax organizer to be completed by the taxpayer, or by way of income tax
Michael J. Jones
For perhaps the first time in tax preparation history, traditional and Roth individual retirement accounts (IRAs) must be screened for so-called “wash sales” — thanks to Revenue Ruling 2008-5, Internal Revenue Bulletin 2008-3. The ruling has no effective date.
Practitioners can accomplish this screening by including a question on a tax organizer to be completed by the taxpayer, or by way of income tax preparation checklists. Failure to catch wash sales involving traditional or Roth IRAs would have the same consequences as failing to catch any other wash sale: The Internal Revenue Service would regard it as an omission.
IRA owners will find it a shock that anything occurring inside a traditional or Roth IRA will increase the...
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