A new provision enacted under the Emergency Economic Stabilization Act of 2008 has stepped up the record keeping and reporting obligations of securities brokers. Brokers are presently required to report sale information to the IRS each year, to assist the IRS in determining if taxpayers are properly reporting their securities gains and losses.
The new provision now requires the broker to include in the report information on the taxpayer's adjusted basis in sold securities, and whether the gain or loss on sale is long-term or short-term. I am sure the brokerage industry is thrilled with the additional headaches and compliance costs imposed on them by Congress. This reporting kicks in after 2010.