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Old 04-16-2014, 12:28 PM
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Accidently misclassified a capital gains transaction as short term rather than long term

I accidentally misclassified a capital gains transaction as short term rather than long term and instead of getting a refund of $800 I will pay $200. Do you think I am better off filing an amendment or just let it go? And if I let it go do you think it will increase audit risk .I sold shares in a s corp corporation in 368 days instead on my tax return I put 250 days because I wrote on the wrong acquisition date. Thanks



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Old 04-17-2014, 06:50 AM
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Originally Posted by janelee View Post

#1;I accidentally misclassified a capital gains transaction as short term rather than long term and instead of getting a refund of $800 I will pay $200. Do you think I am better off filing an amendment or just let it go?



#2; And if I let it go do you think it will increase audit risk .I sold shares in a s corp corporation in 368 days instead on my tax return I put 250 days because I wrote on the wrong acquisition date. Thanks
#1;You need to fill out a 1040x to restate your capital gains. You should file an amended tax return as you need to correct any piece of information that will alter your tax calculations, income .In general, you have three years to make any corrections that result in additional tax refunds. If you are beyond the three-year period, you can only receive refunds for overpaid taxes that were actually paid during the previous two years.As you know,you would complete a sch d / 8949with the correct Information with the corrected "new values". this will result in a corrected net overall gain or loss with the appropriate capital short and long-term gains and losses. The corrected net gain or loss is reported on the form 1040 in the income section on line 13 capital gain or loss in determining AGI.

#2;I do not think so since you unnecessarily pay more tax to the IRS , good for the IRS; no reason to increase IRS audit risk.For the IRS , there is no reason to aduit your return and send the refund back to youUNLESS ou understated ytour tax liability to the IRS.howeer, in common sense as a TP, you need to file an accuarate return .



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