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There can be 2 sources of errors. (i) Mutual fund can adjust distributions including reclassifications of income, ST-CG, LT-CG, ROC. (ii) Broker can adjust cost-basis or reclassify ST/LT CGs or adjust wash-sales.
I investigated in order to determine what I will do.
All adjustments were for transactions for the ST muni FLTDX that I had been using to flow cash during the ZIRP. I checked Nuveen website and this fund had no CGs or ROC and didn't make any changes to its income distributions (at least they are not flagged as such).
In ALL transactions related to FLTDX, Schwab made tiny cost-basis adjustments and that caused about $30 in extra CGs (ST+LT). So, the adjustments are from Schwab's cost-basis recordkeeping. What and why Schwab found those in AUGUST 2022? No specific explanations were included besides generic blah blah.
I will just let it go and not file an amended 1040X. The IRS can bill me for small amount of extra tax if it is bothered by this - the IRS does get the corrected-1099.
Good choice, Yogi. Amended returns seem to be low priority and being weirdly administered; I got a corrected 1099 from Fido of the ROC variety that made a difference in my refund in my favor, filed the X pretty much immediately in April, and it finally shows as of a couple of weeks ago as "received," with a completion date estimated as "late July."
Then just the other day came an email telling me to call an IRS number about it, which has consistently offered the helpful message that "we can't take your call right now."
The dysfunctions at the IRS are a direct result of the Republicans for years deliberately starving it of the funding necessary to properly run the place. Yet another example, as if we needed one, of their continuous assault on the federal government.
And no, I'm no fan of the IRS either, but if we're going to run a country we need to be able to enforce the rules and collect the taxes legitimately due.
@Old_Joe: +1. Former IRS commish Koskinen (2013-17) warned us what the GOP cuts were doing to the agency at the time, and came back on a few interviews recently to hammer home the same message and describe what the new funding will do to improve the dysfunction.
Keep in mind that it's also a GOP saboteur hacking away at the postal service.
And so, Auntie Janet Yellen is throwing money at the IRS. Will it do any good?
It's the Congress giving the IRS a shot of the $ they've lost from GOP obstruction, and yes, it will improve things, and yes, it will be good to see more audits bring in more revenue from the super wealthy and corporations who pay so little in fed taxes now. What I experienced is a direct result of several years of Republican sabotage.
The dysfunctions at the IRS are a direct result of the Republicans for years deliberately starving it of the funding necessary to properly run the place. Yet another example, as if we needed one, of their continuous assault on the federal government.
And no, I'm no fan of the IRS either, but if we're going to run a country we need to be able to enforce the rules and collect the taxes legitimately due.
Schwab has issued ANOTHER corrected 1099 in September involving the SAME short-term muni fund FLTDX from Nuveen/TIAA. Again, the changes are for transactional CGs (ST, LT), and not in reported income or CG distributions. As these changes are related to mutual fund cost-basis recordkeeping, the issue can be with Schwab and/or Nuveen/TIAA. The total underreporting of CGs is now $50 (vs $30 in August correction). I may not do anything still.
If you didn't hold FLTDX, this won't apply to you.
I received a corrected Schwab 1099 today reporting an increase of $0.34 in Short-Term Realized Capital Gains-a transactional CG as referenced by yogibearbull, split between VCFAX and TRBUX . Since the total is less than $1.00, I'm going to ignore this 1099 malarkey ! Currently hold neither fund.
So, there are funds beyond Nuveen/TIAA - from Price, Vanguard, etc.
I am fairly sure now that Schwab a found a bug in its internal cost-basis system, i.e. average cost-basis for mutual funds (default). Funds mentioned SO FAR are bond funds.
Remember, some initial responses to the OP post were that if fund firms revise data, brokers have to issue 1099. But these revisions are for "transactions CGs" (vs distributed CGs* or income or ROC*) for which there are definite sale prices (not changed) and internal average cost-basis for mutual funds.
Comments
I investigated in order to determine what I will do.
All adjustments were for transactions for the ST muni FLTDX that I had been using to flow cash during the ZIRP. I checked Nuveen website and this fund had no CGs or ROC and didn't make any changes to its income distributions (at least they are not flagged as such).
In ALL transactions related to FLTDX, Schwab made tiny cost-basis adjustments and that caused about $30 in extra CGs (ST+LT). So, the adjustments are from Schwab's cost-basis recordkeeping. What and why Schwab found those in AUGUST 2022? No specific explanations were included besides generic blah blah.
I will just let it go and not file an amended 1040X. The IRS can bill me for small amount of extra tax if it is bothered by this - the IRS does get the corrected-1099.
Then just the other day came an email telling me to call an IRS number about it, which has consistently offered the helpful message that "we can't take your call right now."
And no, I'm no fan of the IRS either, but if we're going to run a country we need to be able to enforce the rules and collect the taxes legitimately due.
Keep in mind that it's also a GOP saboteur hacking away at the postal service.
Schwab has issued ANOTHER corrected 1099 in September involving the SAME short-term muni fund FLTDX from Nuveen/TIAA. Again, the changes are for transactional CGs (ST, LT), and not in reported income or CG distributions. As these changes are related to mutual fund cost-basis recordkeeping, the issue can be with Schwab and/or Nuveen/TIAA. The total underreporting of CGs is now $50 (vs $30 in August correction). I may not do anything still.
If you didn't hold FLTDX, this won't apply to you.
I am fairly sure now that Schwab a found a bug in its internal cost-basis system, i.e. average cost-basis for mutual funds (default). Funds mentioned SO FAR are bond funds.
Remember, some initial responses to the OP post were that if fund firms revise data, brokers have to issue 1099. But these revisions are for "transactions CGs" (vs distributed CGs* or income or ROC*) for which there are definite sale prices (not changed) and internal average cost-basis for mutual funds.
*None in my case