| Non-Compliant Financial Institutions And Investors Face Serious Consequences |
| Saturday, 26 June 2010 02:50 |
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June 7, 2010 (MMD Newswire) -- The deadline to comply with the new mandatory cost basis reporting law is nearly here (January 1, 2011) and financial institutions and investors are completely in the dark and oblivious to the broad and deep ramifications which threaten stiff IRS penalties for non-compliance. Worse yet, when mandatory cost basis reporting goes into effect there's no tolerance for calculation errors regarding schedule D forms, 1099 reporting, inherited or gifted securities, or capital gains taxes.
Determining accurate cost basis has traditionally been a frustrating challenge for investors, tax professionals, advisors and institutions alike. Trying to identify and account for corporate actions that affect cost basis can take hours, days or even longer, depending on the complexity surrounding a security and the length of the holding period. With the enactment of the new strict IRS reporting regulations, cost basis accuracy is an absolute must for investors, and financial institutions alike. Should they be worried? The answer is a simple yes, says Financial Analysis Expert, Nico Willis. Nico Willis is the CEO of NetWorth Services and holds the only patented software technology which simplifies the complexities of calculating cost basis by identifying and accounting for corporate actions such as stock splits, mergers, spin-offs, and dividend reinvestments that may have occurred during the holding period. Drawing on a securities database extending as far back as 1925, his software calculates within 3 seconds. NetWorth Services developed NetBasis, a cost-basis analysis engine designed for both individual investors and larger financial institutions which instantly provides a cost effective easy way to avoid the impending IRS deadline to comply with cost basis reporting. It further solves the issue for fortune 500 companies, universities, government agencies, and financial institutions who want to avoid service disruptions, and a potential consumer backlash for under reporting. " Financial institutions aren't soley responsible for accurate cost basis calculations says Nico Willis. " Putting it all in perspective, Willis says that the issue surrounding calculating the adjusted costbasis of securities transactions can impact anyone who has invested in U.S. stock, bond, or mutual fund markets. " There is widespread misconception that cost basis can be easily calculated once the original cost and sell price is known. It is often not that simple as over the life of the investment the stock might have gone through multiple capital events. Even those held for a short period of time, are at high risk for inaccurate results." With the deadline quickly approaching, coupled with an information blackout and misconceptions about cost basis calculations, there exists the potential for a nightmarish scenario in which individual investors and financial institutions alike will bear the burden of a new and complicated tax quagmire that could negatively affect the market, and ultimately how securities are traded in the future. After January 1, 2011 pencil and paper will no longer be an accurate way to calculate cost basis. Cost basis expert Nico Willis holds the only patented technology designed for both individual investors and larger financial institutions. The IRS used this same patented technology for its landmark 2005 Tax Gap Report. For more information visit: www.netbasis.com and www.twitter.com/netbasis Media Contact: Anthony Tomei - NetWorth Services ### |