GainsKeeper Press Release

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GainsKeeper Releases Enhanced GK2005 For Tax Season
Automated tool for determining cost basis for capital gain/loss reporting and IRS Schedule D integrates with most major tax preparation software

Boston - 1/11/05

Wolters Kluwer Corporate & Financial Services division today announced enhancements to GainsKeeper®(www.gainskeeper.com), the leading automated tax lot accounting service for the investment community. GainsKeeper's Schedule D module, the only fully automated solution available to help investors automatically complete their Schedule D income tax filing forms, enhanced reporting functionality and added reconciliation tools and a new extensive help section.

GainsKeeper's Schedule D module helps taxpayers calculate their capital gains and losses, so they can carry the total taxable gains or deductible losses forward to their 1040 income tax return.

"Many investors are under the assumption that the initial purchase price and sale price of an investment are the only figures needed to compute gains and losses," Cameron Routh, head of partner relations for GainsKeeper, said. "Cost bases are actually dynamic and can change over time due to the effects of wash sales and/or corporate actions, such as stock splits, mergers, and spin-offs. This leaves taxpayers with the burden of either long hours spent manually calculating a holding's cost basis events or incorrectly reporting gains and losses. Gain/loss errors lead to either overpaying taxes, the thought of which is never appealing, or underpaying, which potentially results in fines, penalties, and/or interest."

Routh added that Form 1099s furnished by brokerage and mutual fund companies to investors only detail the "sell" side of a transaction. Investors must then match each sell to the corresponding buy, adhering to Internal Revenue Service (IRS) accounting guidelines, and determine the cost basis of each lot sold. While tax preparation software offers a tremendous productivity tool in helping taxpayers complete their tax returns, most tax software simply downloads the 1099s from the brokerage or mutual funds, leaving the investor to match sells to buys and determine the cost basis.

More than just a tax-season tool, GainsKeeper produces Realized and Unrealized reports throughout the year, including the Schedule D report for tax filing. It does this by automatically identifying and adjusting for events that impact cost basis, as they occur. These events include:

 

  • Corporate Actions:  Each year there are more than 5,000 mandatory corporate actions (mergers, splits, spin-offs, etc.) that affect the cost basis for stocks or mutual funds. GainsKeeper automatically identifies these corporate actions and makes all necessary cost basis adjustments for each tax lot in an investor's portfolio.
  • Wash Sales:  When an investor sells a security at a loss and within 30 days-either before or after that sale-purchases a substantially identical security, the investor must defer the loss on the sale of the first shares. He or she must adjust the basis of the second shares to capture that loss. GainsKeeper automatically identifies where wash sales have occurred and makes the appropriate adjustments to basis. If used throughout the tax year, GainsKeeper also can alert an investor to potential wash sales before the transactions occur, ensuring that losses can be realized when planned.
  • IRS Accounting Guidelines:  If not designated otherwise at the time of sale, investors are required to use first-in-first-out (FIFO) for equities and average cost for mutual funds to determine the tax lot they have sold. To complete the Schedule D form, GainsKeeper will automatically perform the calculation based on these methods after a sale has been made. Additionally, GainsKeeper can help tax-smart investors identify the most tax-advantaged lot to sell prior to the transaction, which is known as Specific ID. Investors who use Specific ID must notify their broker before placing the sell order.

 

Integrates With Leading Tax Prep Software

The GainsKeeper-prepared Schedule D form also can be imported into most major tax software prep tools, helping to make the entire tax preparation process faster, easier, and capable of e-filing with the IRS. Additionally, those using an accountant or preparing their own tax return can print their completed Schedule D and supporting detail reports directly from the GainsKeeper site.

To make record keeping easier, GainsKeeper users can import transactions from more than 30 of the leading brokerage companies and from Microsoft® Money.

 

DivTracker Rounds out Tax Smart Tools from GainsKeeper

In addition to the GainsKeeper automated Schedule D module, DivTracker is another tool in the GainsKeeper line offering an easy-to-use web-based tool that enables investors to quickly identify dividends that can take advantage of the lower qualified dividend rates and provides the figures taxpayers need to speed completion of their IRS Form 1040.

Subscriptions start at $49 per year for the complete suite of GainsKeeper tax accounting and efficiency tools.

 

About GainsKeeper

GainsKeeper, a part of Wolters Kluwer Corporate & Financial Services division, provides automated tax-based financial tools and services to the investment community. GainsKeeper Institutional Services (GKIS) provides application service provider (ASP) solutions for financial institutions, enabling them to offer sophisticated tax lot accounting services to their customers without incurring the high cost of building, maintaining, and housing the systems and operations necessary to provide institutional-quality service. GKIS solutions ranging from back-office outsourcing to fully integrated, Internet-based tools and services are utilized by the brokerage, mutual fund, and fund administration industries.

Wolters Kluwer is a leading multinational publisher and information services company. The company's core markets are spread across the health, tax, accounting, corporate, financial services, legal and regulatory, and education sectors. Wolters Kluwer has annual revenues (2003) of €3.4 billion, employs approximately 18,750 people worldwide, and maintains operations across Europe, North America, and Asia Pacific. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. Its depositary receipts of shares are quoted on the Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

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DISCLAIMER: The information and views set forth in this press release are general in nature and are not intended as legal, tax, or professional advice. Although based on the law and information available as of the date of publication, general assumptions have been made which may not take into account potentially important considerations to specific taxpayers. Readers must always make their own determinations in light of their specific circumstances.