In 2010, the IRS published final regulations (regs) relating to broker reporting of stock. On November 25, 2011, the IRS issued proposed regs that would integrate rules for broker reporting of options and debt instruments into the current final regs that explain how brokers must report stock transactions. However, the proposed regs also would make some changes affecting all securities subject to the reporting rules. For example, broker reporting of gross proceeds would be simplified.

Background. Under Code Sec. 6045(g)(3), a note, bond, debenture, or other evidence of indebtedness acquired on or after January 1, 2013 is a security subject to the broker basis reporting rules. And, Code Sec. 6045(h) provides that brokers must report certain information (including gross proceeds) on the sale, exercise, lapse or other closing transaction of an option on a specified security granted or acquired on or after January 1, 2013.

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