A GUIDE TO YOUR 2014 CONSOLIDATED TAX STATEMENT Mailing Schedule // 2014 Form Changes // Filing Information
As part of our ongoing commitment to providing you with the best possible service and support, it is our pleasure to provide you with your Raymond James 2014 1099 Consolidated Tax Statement Guide, designed to assist you in your tax preparation. While we hope you ll find the information in your Composite Statement of 1099 Forms and this guide valuable information, please remember they are not a substitute for obtaining tax-filing advice from a tax advisor who understands your specific situation. We strongly advise you to speak with a tax advisor regarding appropriate filing. This guide should not be used as tax advice; it is simply a reference tool. When preparing your tax return, if you should happen to find conflicting information appearing in the Internal Revenue Code, the Treasury regulations promulgated thereunder or other IRS publications, those authorities supersede anything you might find in this guide. Further, because the information we ve provided here is general by nature, you should always follow the advice of your own tax advisor. 2
TAX YEAR 2014 MAILING SCHEDULE For tax season 2014, we have created a mailing schedule that takes into account the increased complexity of tax reporting while still providing the flexibility of an earlier mailing for those accounts that do not own structured products such as mutual funds, real estate investment trusts (REITs) and unit investment trusts (UITs). As you prepare for 2014 tax reporting, please note these anticipated mailing dates for your Raymond James forms and information. FORM ACCOUNT TYPE EXPLANATION MAILED BY 1099-R Retirement Mailing of year-end retirement tax packets for 1099-R and 5498s if applicable 5498 Retirement Mailing of year-end retirement tax packets for 1099-R and 5498s if applicable 1099 Retail Mailing begins for original 1099s, early mailing excludes holders of securities that are likely to have income reallocated (mutual funds/uits), widely held fixed investment trusts (WHFITs) and widely held mortgage trusts (WHMTs) and real estate mortgage investment conduits (REMICs). 1099 Retail Mailing begins for amended 1099s and original 1099s delayed due to specific holdings and/or income reallocation February 2, 2015 February 2, 2015 February 17, 2015 March 2, 2015 480.6A, 480.6C and 480.6D Retail 480.6A Reporting for Puerto Rico residents holding Puerto Rico securities 480.6C Reporting for non-residents of Puerto Rico who hold Puerto Rico-based securities in their accounts March 2, 2015 480.6D Reporting for Puerto Rico-based residents who may be subject to alternative minimum tax (AMT) 1099 Retail Mailing of remaining Original 1099s March 16, 2015 1099-OID Retail Mailing of 1099-OID statements (REMIC/WHMT) March 16, 2015 2439 Retail Mailing of 2439 statements (Notice to Shareholders of Undistributed Long-Term Capital Gains and taxes paid by regular investment companies) K1 Retail Distribution of K-1 (limited partnership income) by and from the limited partnership (LP) March 31, 2015 Various Please note: Because forms K-1 are processed and mailed by LPs directly to investors, Raymond James cannot control mail dates, which may vary. 3
DELAYED 1099s In an effort to reduce the chance of receiving an amended 1099, Raymond James will delay the mailing of 1099s that meet the following criteria: Mutual funds, UITs, REITs, holding company depository receipts (HOLDRs), royalty and grantor trusts all traditionally have delayed reporting and/or income reallocation (a practice in which companies adjust the tax characterization of income paid during a tax-reporting period). We will potentially delay clients 1099s if they hold these specific security types in an attempt to capture additional updates and avoid amended statements. 1099s for accounts that hold original issue discount (OID) bonds, including select municipal bonds and bonds purchased at the bond premium in 2014, related to 2014 cost basis reporting legislation. 1099s for accounts that hold specific 45-day-delay mortgage backed securities, which are reportable based on record date (i.e., record on 12/31, payable on 2/15). Specific expected cost basis adjustments. AMENDED 1099s Even after delaying statements, issues such as delayed reporting and further income reallocation can still occur. In addition, changes made by mutual funds related to foreign withholding, tax-exempt payments are subject to alternative minimum tax and any portion of distributions derived from U.S. Treasury obligations also result in amended statements. Please be aware that we are required by the IRS to produce an amended tax statement if notice of such an adjustment is received after the original 1099 has been produced. There is no cutoff or deadline for corrected 1099 statements. Additionally, due to IRS regulations, corrections to cost basis also can result in amended 1099 forms. If you are faced with filing an amended 1099, prior to re-filing, discuss the situation with your tax advisor and decide together what makes sense based on your individual tax circumstances. MULTIPLE 1099s You will receive a separate 1099 for each account held at Raymond James. Additionally, if you owned a mutual fund position in 2014 at Raymond James and later in the year transferred that position to be held directly with a fund company, you may receive a 1099 from Raymond James and a 1099 directly from the fund company. If you held securities at another firm for any part of the tax year, you may receive a 1099 for that part of the tax year directly from the other firm. Each of these amounts should be reported separately, listing the individual payers and associated amounts. Before filing your tax return, make certain you have received all your 1099 statements. E-DELIVERY In lieu of a printed tax form, clients using Investor Access can opt into electronic delivery of their tax statements. If you choose this option, you will receive an email link when your tax forms are available online. TURBOTAX USERS Raymond James has continued a partnership with Intuit that will enable you to use TurboTax to import data from your Raymond James or Raymond James Bank 1099 tax statement, as well as your 1099-R retirement tax form. Your privacy is important to us; all data is kept on secure servers that can only be accessed by entering your account number and the unique document ID. The document ID is located in the upper right-hand corner of the cover page on your tax statement. TaxACT USERS Raymond James has established a partnership with TaxACT that will enable you to use TaxACT Deluxe to import data from your Form 1099-B. Your privacy is important to us; all data is kept on secure servers that can only be accessed by entering your account number and the unique document ID. The document ID is located in the upper right-hand corner of the cover page on your tax statement. 4
LIMITED PARTNERSHIP (K-1) Your 1099 does not report distributions paid by limited partnerships. If you owned units in a limited partnership anytime during 2014, you should receive a Schedule K-1 directly from the partnership. K-1s are normally mailed in mid-march. If you do not receive your K-1, you should contact the partnership. K-1 tax information for publicly traded partnerships can be accessed faster while eliminating the need for tax information to be mailed. Visit Tax Package Support to locate applicable investments, create an account by registering an email address and select the option to Eliminate Paper K-1s. Investor tax information will then bypass the U.S. Postal Service and instead be delivered securely through the partnership s website. A partnership will even notify you via email when your K-1 is available. Once the K-1 is accessed online, you can save the electronic version to your personal computer or print a physical copy. Shareholders can also contact a partnership s tax help line for further assistance or to request a mailed copy of the K-1. ROYALTY TRUST PACKETS The mailing deadline for Royalty Trust Tax booklets is March 16. Please note: Because this informational tax booklet is processed and mailed directly from the issuer, Raymond James cannot control mail dates. FORM 2439 Some regulated investment companies (RICs) elect to retain and pay taxes on certain net capital gains income they receive during the tax year. We must report your share of the gains and related taxes paid by an RIC. Raymond James will send Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, by March 31 for any RICs that fall in this category. NEW COST BASIS LEGISLATION FOR TAX YEAR 2014 In compliance with the Economic Stabilization Act of 2008, which requires Raymond James, along with all broker/dealers, banks, custodians and transfer agents, to record and report more detailed information on securities sales within reportable accounts to the IRS, we continue to adhere to cost basis reporting requirements in accordance with IRS rules. Raymond James reports cost basis information to the IRS on Form 1099-B for any covered securities (securities acquired on or after the effective date) you sell. Covered securities are grouped in potentially two labeled sections of Form 1099-B so you can differentiate what information is reported to the IRS and what is not reported. Raymond James does not send cost basis information for uncovered securities to the IRS, but does provide cost basis on uncovered securities in potentially three separately labeled uncovered securities sections of Form 1099-B as a service to you. This information may have been estimated by you or your financial advisor, or may have been obtained from third-party sources. In these instances, Raymond James cannot guarantee the accuracy of the information. You remain responsible for accurate reporting of cost basis on both covered and uncovered securities to the IRS. Cost basis information is also displayed for nonreportable accounts as a service. Tax season 2014 marks the start of the final phase of cost basis legislation, meaning the cost basis and additional tax information for certain fixed income securities and options is now reportable to the IRS. The requirement for additional reporting also brought a number of visual changes to the Composite 1099. A comprehensive document on 2014 cost basis legislation for fixed income and options is available at raymondjames.com/ costbasis. Helpful information on changes to the 1099- B and other tax forms due to 2014 regulations can be found at raymondjames.com/taxreporting. 5
COST BASIS REPORTING BY SECURITY TYPE SECURITY TYPE ACQUIRED ON OR AFTER EFFECTIVE DATE REPORTED ON 1099 FOR 2014 COVERED (REPORTED TO THE IRS) Equities 1 January 1, 2011 Yes Yes Regulated investment company (RIC) 2 shares, including mutual funds, and dividend reinvestment plan (DRP) shares January 1, 2012 Yes Yes Bonds 3 and select options 4 January 1, 2014 Yes Yes Variable rate debt, convertibles, bonds issued in foreign currency and others not outlined in 2014 start date January 1, 2016 Yes (informational purposes) No TAX YEAR 2014 CHANGES TO 1099 FORM WHAT S NEW ON YOUR 1099 FORMS? There have been multiple changes to the 1099 forms. The following is an overview of the most significant changes. OVERVIEW OF 1099 FORM CHANGES DIVIDENDS AND DISTRIBUTIONS, 1099-DIV STATE TAX WITHHELD The amount of any state backup withholding has been moved from separate income summaries in favor of a single summary section devoted to state tax withheld. The state name and ID are found in the existing detail section devoted to state withholding and pictured later in this document. Aside from the reallocation of state withholding information, the 1099-DIV remains the same as it has been in previous years. 6
INTEREST INCOME, 1099-INT STATE TAX WITHHELD Same as the changes to the Form 1099-DIV above. MARKET DISCOUNT AND BOND PREMIUM Any amount of market discount or bond premium for covered tax lots (any lot purchased directly with Raymond James beginning in 2014) is reported in newly added boxes. Market discount is reflected in line 10 and bond premium in line 11. To assist you in categorizing the type of bond there are four unnumbered lines that reflect the amount of total bond premium attributed to non-treasury obligations, Treasury obligations, tax-exempt obligations and tax-exempt private activity obligations. COORDINATION WITH OTHER FORMS Information shown previously in several detail sections of the 1099 form are now aggregated in Form 1099-INT. These include interest income, taxexempt interest income, tax-exempt OID and taxable OID. There are provisions for reporting market discount and acquisition premium, but not for bond premium. Therefore, if there is bond premium on a taxable OID bond, the detail will be presented within the interest detail and summarized on Form 1099-INT (for covered lots) as well as in a new summary of adjustments to income and OID (uncovered lots) described later. TAX-EXEMPT ORIGINAL ISSUE DISCOUNT For any covered tax lots of tax-exempt OID bonds, amounts of bond premium or currently recognized market discount must be reported in lines 10 and 11 (pictured below) of Form 1099-INT. Detail of such amortization is found in the taxexempt OID detail pages and is aggregated in the supplemental summary section covering adjustments to interest and OID. 7
MISCELLANEOUS INCOME, 1099-MISC FOREIGN COUNTRY AND WITHHOLDING The IRS eliminated the boxes on Form 1099-MISC that were devoted to foreign country and foreign tax withheld and identification of the related jurisdiction. Accordingly, this form no longer has lines for aggregation of such amounts. STATE TAX WITHHELD Same as the changes to the Form 1099-DIV above. The extract from the composite statement shown below depicts the remaining lines on Form 1099- MISC for 2014. ORIGINAL ISSUE DISCOUNT INCOME SUMMARY This section is an aggregation of all the Forms 1099-OID. Changes to the underlying forms are generally reflected in this section. FOREIGN COUNTRY AND WITHHOLDING The IRS eliminated the boxes on Form 1099-OID that were devoted to foreign country and foreign tax withheld and identification of the related jurisdiction. Accordingly, the summary no longer has lines for aggregation of such amounts. STATE TAX WITHHELD Same as the changes to the Form 1099-DIV above. MARKET DISCOUNT AND ACQUISITION PREMIUM The Original Issue Discount Income Summary now has lines for reporting currently recognized market discount and acquisition premium. The extract from the composite statement below depicts the remaining lines on The Original Issue Discount Income Summary. 8
ADJUSTMENTS TO INTEREST AND ORIGINAL ISSUE DISCOUNT This is a new section for the summary pages. Items displayed in previous years, such as accrued interest paid, are found here along with new lines showing additional income or adjustments to income on uncovered fixed income holdings. TAXABLE ACCRUED INTEREST PAID Previously, there were distinct lines dedicated to taxable accrued interest paid and taxable accrued interest paid on OID bonds. These have now been rolled into a single line, which includes only activity with transaction codes that are related to taxable, non-treasury instruments. TAXABLE ACCRUED TREASURY INTEREST PAID With this allocation of accrued interest paid between Treasury and non-treasury instruments, you are able to judge immediately whether interest income reported on the Form 1099-INT should be offset by premiums on your tax return. BOND PREMIUMS Bond premiums for uncovered lots are included here. They are shown in four distinct categories to more easily determine when to offset interest income with like types of premiums. ACQUISITION PREMIUM For taxable securities, the acquisition premium for uncovered lots is shown here. For tax-exempt lots, the amounts of acquisition premium reflect all lots, covered or uncovered. The extract from the composite statement below depicts the lines described above as they will appear on the composite statement. Items not shaded appeared on previous years composite statements as Interest Payments and Other Adjustments. 9
STATE TAX WITHHELD This new section summarizes any state backup withholding done on the various types of income formerly reflected on Forms 1099-DIV, 1099-INT and 1099-MISC. The details still appear in the income detail and the form s designated state tax detail section. The detailed state reporting section contains the originating form, the state and the state ID, which was previously reported on the forms mentioned. NON-REPORTED INCOME, FEES, EXPENSES AND EXPENDITURES The items included here were previously grouped under a series of subheadings. They are now in a single section in which each line s description points back to the detail pages (Other Receipts, Expenses, Opening Transactions, Fees and Payments Received, and Income and Adjustments) where the individual transactions are displayed. EXPANDED SCOPE OF OPENING TRANSACTIONS In addition to the changes related to fixed income cost basis reporting, closing options transactions became reportable in 2014. Option contracts that are cash settled must now be reported on Form 1099-B, thus the distinct detail pages for option transactions have been eliminated. Opening options transactions now appear under Opening Transactions. At the summary level, this change results in revised descriptions. Consistent with the changes discussed above, line items previously found under Options Transactions (Sales, Short sales, Purchases and Purchases to Close) were eliminated. 10
SALES TRANSACTIONS This section summarizes sales proceeds and other information grouped by the definitions of IRS Form 8949. A new column has been added for market discount. Amounts in this column show the portion of the sale proceeds that are to be treated as ordinary income when a position is sold. The previous column that indicated where in the 1099 the lot-level detail could be found (1099-B or Proceeds not Reported to the IRS) has been removed. The example below depicts the changes to headings, totaling and column additions. 11
TRANSACTION DETAIL SECTIONS Detail for Dividends and Distributions FOREIGN WITHHOLDING The country symbols are now a suffix to the description of the transaction type instead of in a separate column. Detail for Interest Income For 2014, the IRS has added boxes for bond premium and market discount, but only for covered tax lots. Since bond premium and market discount may occur for uncovered lots as well, the detail on our form will contain instances of premium and discount for both covered and uncovered lots. These items will be identified as bd prem covered or mkt disc uncovered. This will allow you to reconcile to the totals effectively. The 2014 Form 1099-OID must also be presented at the tax-lot level. As a result, cash-based events previously found on the OID page will now be found within the interest detail. This includes accrued interest paid, non-qualified stated interest received and shortfall of interest on contingent payment debt instruments. Also, any bond premium on OID bonds is presented here. Detail for tax exempt interest will be displayed similarly. The example below depicts the changes to the transaction details section. 12
PAGES WITH TRANSACTION DETAIL AND SECURITY LEVEL SUMMARIES Original Issue Discount (1099-OID) The IRS now requires that a separate Form 1099-OID be produced for each tax lot. Therefore, the OID pages have been redesigned to include only the accrual-based information. Cash-based events have been moved to the interest detail pages. Payment-level detail for other periodic interest, accrued interest paid and non-qualified interest received now appears within the interest detail pages. Bond premium is included with the interest details for three reasons: It is an offset to that income Bond premium on non-oid bonds already appears there The IRS did not include a box for bond premium on Form 1099-OID with their instructions MARKET DISCOUNT AND ACQUISITION PREMIUM The IRS added boxes 5 and 6 to facilitate reporting of market discount and acquisition premium for covered tax lots. This information was previously displayed in the supplemental section of the composite 1099 statement. STATE TAX WITHHELD As with other forms, this information has been moved to the summary section devoted to state tax withheld. COLUMNS REMOVED To accommodate the columns needed for tax lots, several columns previously included in the accrual-based display, including adjusted cost basis and bond premium, have been eliminated. SECONDARY MARKET ADJUSTMENTS Although these amounts have always been part of the tax form, some now have designations as boxes. MARKET DISCOUNT A column has been added to display market discount. For a covered tax lot, this will roll into the market discount total on Form 1099-INT. For uncovered lots, it will be included in the summary of adjustments to interest and OID. ACQUISITION PREMIUM A column has been added to display acquisition premium. All acquisition premiums, whether covered or uncovered, are included in the summary of adjustments to interest and OID. BOND PREMIUM Bond premium on a covered lot appears in the transaction detail of tax-exempt interest. If covered, it will be part of the aggregation of bond premium on Form 1099-INT. If uncovered, it will appear in the summary of adjustments to interest and OID. PROCEEDS FROM BROKER AND BARTER EXCHANGE TRANSACTIONS (1099-B) Various boxes have been renumbered or renamed CASH SETTLED OPTIONS Now included on Form 1099- B are cash settled options, closing transactions and the special requirement for showing cost and proceeds when the closed position was a written option. WASH SALE LOSS DISALLOWED AND MARKET DISCOUNT For 2014, the column previously titled Wash Sale Loss Disallowed (WSLD) has been renamed Adjustment and is now used to display either market discount or wash sale loss disallowed. ADDITIONAL FILING INFORMATION BOX INSTRUCTIONS IRS box-by-box instructions can be found at the end of your 1099 Composite Statement. FORM 1099-DIV All taxable dividend-related transactions are reflected on the Dividends and Distributions detail page and grouped by security. This allows you to see all transactions related to a particular security together. The Transaction Type column provides a clear description of all activity. Each year, many dividend payments, especially those from mutual funds and REITs, are reallocated after the end of the tax year to different distribution types by the companies that paid them. Only the reallocated amounts are displayed. 13
These transactions are indicated by a 1 in the Transaction Type column and a footnote at the bottom of the page. FORM 1099-MISC Miscellaneous income is a type of payment that is not classified as dividend, interest, gross proceeds or OID. 1099 COMPOSITE/FORM 1099-B Form 1099-B includes cost basis information for both covered securities (reported to the IRS) and uncovered securities (not reported to the IRS) sold or exchanged during 2014. Cost basis information includes: The date the security was acquired The holding period of the security: long-term (held more than one year) or short-term (held one year or less) Disallowed loss amounts, if applicable Gain/loss information Covered or uncovered (cost basis provided for uncovered securities when available) For uncovered securities, cost basis is provided for informational purposes only. Cost basis for uncovered securities may have been estimated by you or your advisor, or may have been obtained from third-party sources. In these instances, Raymond James has not verified the accuracy of the cost basis information. For covered securities, the 1099-B broker reporting rules do not require Raymond James to take all client-specific tax rules that might affect cost basis or holding period into account in reporting this information to taxpayers. Accordingly, it is important that you review the cost basis information provided by Raymond James with your own tax advisor, and adjust cost basis or holding period for any tax rules that apply to your specific tax situation. IRS FORM 8949 SALES AND OTHER DISPOSITIONS OF CAPITAL ASSETS AND SCHEDULE D The detail reported on the Form 1099-B flows through to the IRS Form 8949, which needs to be completed by the taxpayer. PROCEEDS RECORDS The IRS has indicated that it is acceptable to show more information on the Form 1099-B than is actually reported to the IRS. Each section of the Form 1099- B is clearly marked with the Term (short or long) and the Covered/Uncovered indicator. Based on the designation of covered or uncovered, specific column headings are shaded to indicate information that is not supplied to the IRS. This includes date of acquisition and cost or other basis required by the IRS for covered tax lots. There is a note over these columns that states, These columns are not reported to the IRS. Additional information that may be displayed on a proceeds transaction, if supplied, includes Wash Sale Loss Disallowed (required for a covered tax lot). SHORT SALES We are required to report short sales in the year the transaction closed. PROCEEDS FROM BROKER AND BARTER EXCHANGE TRANSACTIONS Income tax withheld on gross proceeds now includes both federal and state withholdings when applicable and has been broken out to a dedicated section of Form 1099-B. REMICS Real estate mortgage investment conduits (REMICs) are a special class of CDO. Income derived from REMICs must be reported using the accrual method of accounting; therefore, the reporting is not included in the initial consolidated 1099. If you owned any of the following securities in 2014, a separate Form 1099-OID will be mailed to you by March 16. 14
Real estate mortgage investment conduits (REMICs) Collateralized mortgage obligations (CMOs) Collateralized debt obligations (CDOs) WHFITs WHMTs WIDELY HELD FIXED INVESTMENT TRUSTS (WHFITs) AND WIDELY HELD MORTGAGE TRUSTS (WHMTs) A WHFIT is defined as a grantor trust, which acts as a pass-through vehicle. The beneficial owner owns an undivided interest in the underlying assets. The affected market segments include UITs, royalty trusts, commodity trusts and HOLDRS. WHMTs are defined as WHFITs, the assets of which are mortgages, amounts received on mortgages and reasonably required reserve funds, as measured by value. We are required to report all items of gross income and proceeds from WHFITs and WHMTs on Form 1099-B. Items of income required to be reported include non-pro-rata partial principal payments, trust sales proceeds, redemption asset proceeds and sales of trust assets on a secondary market. The reporting deadline is March 16 for these investments. PRINCIPAL PAYMENTS Under WHFIT regulations, all non-pro-rata partial principal payments must be reported on Form 1099-B. To meet this requirement and demonstrate reporting consistency, Raymond James reports principal payments for all investments on Form 1099-B. GENERAL COST BASIS INFORMATION EVENTS THAT CAN IMPACT COST BASIS Please be aware of events that could potentially impact your cost basis and tax reporting for securities that were sold during the prior year. These events can include: Corporate actions Events like stock splits, mergers, spin-offs and other reorganizations can result in modifications to cost basis and gain/loss reporting. Accretion and amortization To comply with 2014 regulations, cost basis for certain fixed income securities may be adjusted for accretion (discount bonds) or amortization (premium bonds). Income reallocation Certain distributions and subsequent reallocations may require an adjustment to cost basis. CBAM elections Cost basis accounting method (CBAM) elections such FIFO (first-in-first-out) and LIFO (last-in-first-out) can impact cost basis on realized tax lots. Gifting and inheritance Securities that have been gifted or inherited are subject to IRS guidelines for cost basis and holding period adjustments. Wash sales Wash sales can result in disallowed losses as well as cost basis and date adjustments to replacement tax lots. 2014 MUTUAL FUND STATE TAX INFORMATION The percentages represent income that may be exempt from taxation in your state. 15
WHAT IF COST BASIS IS MISSING IN THE UNCOVERED SECTION ON MY FORM 1099-B? If cost basis is missing from the Uncovered section(s) of your Form 1099-B, please keep in mind this information is not furnished to the IRS. We encourage you to work with your financial advisor and utilize the resources that Raymond James provides to establish missing cost basis if possible. In the event you determine your cost basis after you receive your Form 1099-B, please be mindful of the covered/uncovered status of the security, as an amended form may not be required. QUESTIONS If you have any suggestions, questions or comments in regard to this guide or your Composite Statement of 1099 Forms, please contact your financial advisor at the telephone number on the cover page of your Composite Statement of 1099 Forms or our Client Services department at 800.647.7378. SUPPLEMENTAL INFORMATION The 1099 includes a Supplemental Information section that contains a Summary of Gains and Losses. Additionally, the Supplemental Information section includes the Summary of Non-Reported Income, Fees, Expenses and Expenditures. Please consult with your tax advisor to determine the tax treatment of these transactions based on your tax situation. 1 Equities include corporate stock, ADRs, UITs, ETFs, REITs (other than stock in a regulated investment company [RIC] or stock acquired in connection with a dividend reinvestment plan [DRP]). Internal Revenue Code section 6045(g)(3)(C)(i) provides that the applicable date is January 1, 2011. 2 For stock in a RIC (RIC stock) or stock acquired in connection with a DRP (DRP stock), 6045(g)(3)(C)(ii) provides that the applicable date is January 1, 2012. 3 Instruments for which yield and maturity may be determined under 1.1272-1(b), (c), (d). **Factor bonds and short term debt will never be covered under the legislation. 4 Select options to include options on specified securities (i.e., stock, index), on financial attributes of specified securities (i.e., interest rates or dividend yields), stock rights, warrants, and stock acquired through the exercise of a compensatory option (i.e., incentive stock options and nonqualified stock options) *Legislation requires firms to provide a Cost Basis Transfer Statement when covered securities are delivered to another firm. If no statement is received, a request is made and the position will be considered uncovered. 16
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