$8,000 LOSS mistaken 4 $92,000 GAIN in '96

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bo66ie

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Back in early 1996 we invested $100,000 (25k, 25k, and 50k) in mutual funds with Wells Fargo Bank. We also cashed them all out within the same year. The total cash out value was $92,000 do to early withdrawal penalties. My boyfriend (John) didn't file any tax returns from about 1993 through 2003 (he wasn't working). A couple of years after he started working again, the state and federal both claimed he owed capital gains tax for the $92,000. He was working with an advocate who staved them off for a couple of years claiming a hardship, before she realized what had happened. She said that because the funds were bought and sold within the same year, there was no capital gains, there was actually an $8,000 loss. I guess the bank had sent them the information that we had sold them, but nothing about when they were purchased. She had us fill out an amended tax return that showed that the mutual funds were bought and sold at a loss within the same year. We sent the paperwork to the state and they immediately stopped all actions against him. We sent the Federal Amended Return to the IRS, and they won't let it go! We sent all the proper paperwork from the bank and the amended tax forms, but all they would tell him was something to the effect of "You can make us an offer of partial payment and settle it now, or you can wait a year, at which point it will have been 10 years and it'll 'fall off' your record anyways." :confused: Of course, when he filed his tax return this year, they took his $450 refund and they will also take his $600 stimulus check. Does anyone have any idea why the state would be so reasonable, yet the Feds are unwilling to even look at it? I thank you for taking the time to read this and I hope someone can shed a little light on this. Much appreciated, Bobbie
 
I have no idea. Sometimes it's just a matter of reaching the wrong people and it sounds like the person you were talking to just didn't care to listen. If trying a new person or supervisor doesn't work, I'd suggest written correspondence. I've had excellent results speaking to another person when a few prior could simply not appreciate the communication!
 
Thanks, we'll try again...
 
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