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ROSENTHAL COLLINS GROUP, LLC -UNDERSTANDING YOUR 1099-B

The following example may help you understand the information we have provided to you on your 1099-B statement for 2008:


  Rosenthal Collins Group, LLC
216 West Jackson Blvd., Suite 400
Chicago, Illinois 60606
rcg1099@rcgdirect.com
*** Non-Exempt***
Dec 31, 2010 (312) 795-7849 R12345 123456789
  1099 Substitute Statement Tax ID 111 11 1111
Payer 36-4253919
Mary Smith
1 Main Street
Anywhere, USA
  1099B Proceeds:
Broker Trans

1099-B PROCEEDS FROM BROKER & BARTER EXCHANGE TRANSACTIONS –
OMB.1545-0715 –REGULATED FUTURES CONTRACTS–

8. - - > Profit/(Loss) Realized on Futures Contracts in USD for 2010
- - > Profit/(Loss) Realized on Futures Options in USD for 2010
* * * Total Reported for Line 8 in USD for 2008. . . . . . . . . . . . . . .
( 9,000)
( 2,000)
(11,000)
 
       
       
9. - - > Total Unrealized P/L Converted to USD on Futures. . . . . 12/31/09
- - > Total Unrealized P/L Converted to USD on Options. . . 12/31/09
* * * Total Reported for Line 9 in USD for 2009
800
200
1,000
 
10. - - > Total Unrealized P/L Converted to USD on Futures . . . .. 12/31/10
- - > Total Unrealized P/L Converted to USD on Options. . . .. 12/31/10
* * * Total Reported for Line 10 in USD for 2010. . . . . . . . . . . . . . . .
25,000
2,000
27,000
 
       
11. Aggregate Profit or (Loss) from Lines 8, 9 and 10 . . . . . . . . . . . . . . . 15,000  
       

* * * END OF 1099-B STATEMENT (REGULATED FUTURES CONTRACTS) * * *

Line 8 - Represents the profit or loss realized on futures and the net premium paid or received for options on futures contracts closed or memo offset in 2010. In this example, Mary Smith realized a loss of ($11,000).

Line 9 - Represents the unrealized profit or loss on futures contracts and the net option valuation at the end of 2009. This amount would have been included in Mary Smith's 2008 tax return.

Line 10- Represents the unrealized profit or loss on futures contracts and the net option valuation at the end of 2010.

Line 11 - Represents the combined profit or loss that will be reported on your 2010 tax return. In Mary Smith's case, the $15,000 profit equals the ($11,000) realized loss, plus the $27,000 unrealized gain, minus the $1,000 unrealized loss as of December 31, 2007. You should report this amount on Form 6781 and Schedule D.

When will I receive my 1099-B?

What information do I report to the IRS?

How do I know whether I had a profit or loss for the year?

What is an unrealized profit or loss?

How is the premium paid/received for options reflected in my 1099-B?

How do I know if I have an unrealized profit or loss?

Why don't Lines 8, 9 and 10 equal Line 11?

Why did I receive a "1099-B Substitute Statement"?

If I have a Gross Proceeds section on my 1099-B, what does it mean?

How are security futures products (e.g. single stock futures) reported on my 1099-B?

What if management fees or other cash payment items were posted to my trading account?

What tax forms will I use to report the figures shown on my 1099-B?

If I receive my statement via email, will I also receive my 1099-B via email?

How do I request a duplicate 1099 Statement?

How do I obtain copies of my monthly statements?

I didn't receive a 1099-B this year. Why not?

Additional questions?


_____________________________________

When will I receive my 1099-B?
The 1099-B 's are mailed to clients during the last week of January.
What information do I report to the IRS?
Report the amount on Line 11 for profit and losses on futures and futures option contracts.
How do I know whether I had a profit or loss for the year?
A loss is enclosed by parentheses. If the figure on Line11 is in parentheses, you will report a loss for the year.
What is an unrealized profit or loss?
Profits or losses are realized when a futures position is closed. Profits and losses are unrealized when a futures or futures option position is open at the end of the year. The amount of unrealized futures profit or loss is the difference between the initial purchase or sale price and the settlement value of the position on the last trading day of the year. The unrealized option profit or loss is the net option valuation of the last trading day of the year.
How is the premium paid/received for options reflected in my 1099-B?
The option premium paid or received from an option is included in line 8 – Profit (Loss) Realized on Futures Options. The value of the option at December 31, 2010 is included in line 10 – Total Unrealized P/L Converted to USD on Options.
How do I know if I have an unrealized profit or loss?
If you had open positions at the end of 2010, your unrealized profit or loss for those contracts will be shown on Line 10. If you had open positions at the end of 2009, your unrealized profit or loss for those contracts will be shown on Line 9.
Why don't Lines 8, 9 and 10 equal Line 11?
The profit or loss on Line 11 equals the 2009 realized profit or loss on Line 8 plus the 2010 unrealized profit or loss on Line 10 minus the 2009 unrealized profit or loss on Line 9. You subtract the amount on Line 9 to avoid double counting of amounts already reflected on your 2007 return.
Why did I receive a "1099-B Substitute Statement"?
The IRS allows us to issue Form 1099-B or a substitute form that contains identical information.
If I have a Gross Proceeds section on my 1099-B, what does it mean?
If you have transactions reported as Gross Proceeds, you have conducted some type of cash market or securities futures product trading during the year. Common types of cash market trading include selling a U.S. Treasury instrument or making a delivery of a cash commodity such as corn or silver. For cash market transactions, the Gross Proceeds section reflects the cash received. You are responsible for determining the original cost basis and any gain or loss. However, for security futures products, both the purchase and sale proceeds are included in the Gross Proceeds section.
How are security futures products (e.g. single stock futures) reported on my 1099-B?
Security futures products are reported on a gross proceeds basis and are considered short-term capital gains or losses for tax reporting. Both the purchase and sale proceeds are included in the Gross Proceeds section.
What if management fees or other cash payment items were posted to my trading account?
The IRS only allows us to deduct from your futures/options profit (loss) those commissions and fees directly related to the executed transactions. Management fees paid to a trading advisor, monthly payments for leasing electronic trading software, or other similar cash payment items are not considered directly related to the transaction and do not reduce the trading profit (loss) reported in your 1099-B. These items may be considered as business expenses. Please consult your tax advisor as to the proper treatment of these expenses on your tax return.
What tax forms will I use to report the figures shown on my 1099-B?
You will most likely need IRS Forms 6781 and Schedule D. Questions about these forms should be directed to your tax advisor or the IRS
(www.irs.gov).
If I receive my statement via email, will I also receive my 1099-B via email?
1099's are mailed to customers and not emailed.
How do I request a duplicate 1099 Statement?
You may request a duplicate through your broker or call RCG's 1099 hotline at (312) 795-7849. You may also email your questions and/or requests to rcg1099@rcgdirect.com.
How do I obtain copies of my monthly statements?
You may request monthly statements through your broker or call RCG's 1099 hotline at (312) 795-7849. You may also email your questions and/or requests to rcg1099@rcgdirect.com. There will be a $5.00 per statement fee for this request.
I didn't receive a 1099-B this year. Why not?
There could be several reasons. If your account is a corporate account, the IRS does not require us to issue a 1099. (You are, however, required to report any income or loss on your corporate return. Your monthly statements provide this information.) If there was no activity in your account for the year, we also would not issue a 1099. If you moved or your address was incorrect, you may not have received the 1099 we mailed to you. Please send address changes with the signature(s) of all account owners to Rosenthal Collins Group, LLC, Compliance Department, 216 W. Jackson Blvd., Suite 400 Chicago, IL 60606 or fax us at 312 795-7937.
Additional questions?
RCG has a 1099 hotline at (312) 795-7849. We try to answer all calls during regular business hours. If you leave a message, we will call you back within 48 hours. You may also email your questions and/or requests to rcg1099@rcgdirect.com.


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