Cost Basis & IRS Reporting: 3 Years Later Moderator: Joan DiBlasi, Aflac Incorporated Speakers: Stevie Conlon, Woltzers Kluwer Financial Services Kevin McCosker, Pershing, A BNY Mellon Company

Cost Basis & IRS Reporting – 3 years later! Moderator: Joan DiBlasi - Aflac Incorporated Panelists: Stevie Conlon –Wolters Kluwer Kevin McCosker – Pershing LLC (a BNY Mellon Company) 2016 SSA Annual Conference Fairmont Chicago Millennium Park July 20, 2016

Problems? Requests for Cost Basis – Send Paper or email or fax? Why different Transfer Control Numbers? We send basis on the number we receive – but broker requesting basis on different number??

Paper Statements vs Online It would be much easier for you to send an online Transfer Statement, rather than paper. Use DTC’s CBRS product…simple to use and you can copy and paste if you want to, or if your system allows, update the TCN – to what the broker is expecting and resend!

Tax Issues! Clients are beginning to expect cost basis reporting for everything and there is frustration over the prohibition on providing cost basis for compensation related options (or reporting such basis in the reported basis of stock obtained via option exercise)

Tax Issues! To what extent will cost basis reporting trigger IRS demand for additional taxes due to 1099 matching program?

Tax Issues! Withholding tax issues for U.S. stock derivatives (including rights, warrants and convertibles—IRC Secs. 305(c) & 871(m)) is creating additional compliance needs

Tax Issues! Focus on U.S.  sourced income paid to foreign investors. 1042-S Audits

QUESTIONS???

Cost Basis & IRS Reporting – 3 years later! Joan DiBlasi Aflac Incorporated (706) 596-3385 jdiblasi@aflac.com Kevin McCosker Pershing LLC a BNY Mellon Company (321) 249-4310 kmccosker@pershing.com Stevie Conlon, Sr. Director & Tax Counsel Wolters Kluwer, Chicago & Boston (847) 652-6893 Stevie.conlon@wolterskluwer.com