You are preparing a tax return and note that your client received several 1099-Bs, Proceeds from Broker and Barter Exchange Transactions. Unfortunately, the brokerage statements that your client provided do not identify the cost basis for the stock that was sold. Your client received proceeds of $875,000 from the sale of 40 different stocks that were purchased over 20 years, received as gifts or inherited. What will you do to prepare an accurate tax return? What questions will you ask your client?
Assume that your client says that the cost basis, to the best of her knowledge, is equal to the proceeds of the sale. How will that impact how you prepare Schedule D?
What ethical issues do you, as a tax preparer, have to deal with?