At the end of the day the IRS cares about your net loss or gain, and what's short term vs long term gains.
So I typically sum up my various investments into those 2 buckets, by broker. if i ever get audited, i have the individual trades i can share if needed.
https://www.irs.gov/instructions/i8949#en_US_2021_publink594...
These are the very same exceptions that tax software uses.
> The Ordinary box in box 2 isn’t checked
There is no "box 2" on the 1099-Bs I have. It is on the standardized IRS one, so the instruction from the IRS seems fine … but this is a great commentary on the state of the American tax system and how complicated it is.
(Variations on this theme cropped up multiple times during this year's prep, too…)
Exception 2 doesn't seem to list out what the conditions to qualify for it are, it only lists the procedure for the exception. I'm not sure how anyone is supposed to take it, for that reason.
> These are the very same exceptions that tax software uses.
TurboTax does not appear to take advantage of Exception 1. It would appear to have applied to my situation this year, and yet, TurboTax filled out a complete Form 8949, with each transaction, just like the parent comments hint at.
In practice, the condition for Exception 2 is "the 1099-B is already correct and you don't need to make further adjustments". Because if it isn't, you might as well fill out Form 8949.
It's definitely possible to have tax software summarize, although I suppose they might not do it by default.
https://ttlc.intuit.com/community/entering-importing/help/ho...
The tax code is just sufficiently complex enough that I don't feel safe making that assumption. You're probably right, but "probably" is too low a bar here.
> Brokerages tend to produced a condensed 1099-B to save space: it would be very cumbersome parsing hundreds of pages of a full-IRS-layout 1099-B.
… but like, isn't that the problem? If nobody uses the standardized form because it's too cumbersome … simplify the tax code.
Or standardize the data format and stop using PDF & human toil as a data transfer layer/format.
> It's definitely possible to have tax software summarize
Certainly it is possible. I was responding to the comment that it happens in practice, at least for the largest such software.
The problem is, the one tax code is made for the whole country to use. If there is one person who needs the full form to correctly report his tax situation, the tax code has to be that complicated. And the 99.99999% simple cases have to suffer. You have better idea?