Taxpayer has a margin account

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Reference no: EM131219139

Taxpayer has a margin account with Investment Co. The stocks and bonds in the account earned dividends and interest of $10,000 in 2014. The $10,000 was paid directly to the margin account and used for reinvestment purposes only. Taxpayer received a substitute form 1099-DIV which indicated the composition of the $10,000. However, taxpayer did not report the $100,000 as income in 2014 but rather in 2015 when taxpayer closed the account. The IRS has indicated that Taxpayer must include the $10,000 in 2014 and in additional to taxes assessed interest and penalties. Taxpayer seeks your advice.

Reference no: EM131219139

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