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why capital gains in HSA was reported to IRS ?
Old 05-14-2021, 08:32 AM   #1
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why capital gains in HSA was reported to IRS ?

Had a HSA brokerage acct with TDAmeritrade, the acct was rolled over directly to Fidelity last year, all equities were liquidated so I had some capital gains. The fund went straight to Fido.

Doing my tax own tax now (HH Block software) and I just manually downloaded a report for 1099-B from TDAmeritrade, it says the gains are taxable and reported to IRS. Is this normal or is that a mistake by TDAmeritrade? How should I file these gains?

I live in CA so capital gains in HSA are taxable but not at the federal level though.

see screenshot of 1099-B

BTW, I don't think I receive a paper 1099-B and when I talked to their rep, she said she didn't see a 1099-B either. Not sure if this makes any difference.
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Old 05-14-2021, 09:20 AM   #2
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No, a capital gain in a HSA brokerage account would not be taxable or reportable to the IRS unless you withdrew an amount equal to the gain from the HSA (and didn't have that amount of qualifying medical expenses). If you log on and go to their tax center is there a 1099-B?

My guess is that the 1099-B that downloaded into your tax software was for CA tax purposes only and not for federal purposes. Does the gain show up on your federal return Schedule D? On your CA return?
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Old 05-14-2021, 09:52 AM   #3
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Quote:
Originally Posted by pb4uski View Post
No, a capital gain in a HSA brokerage account would not be taxable or reportable to the IRS unless you withdrew an amount equal to the gain from the HSA (and didn't have that amount of qualifying medical expenses). If you log on and go to their tax center is there a 1099-B?

My guess is that the 1099-B that downloaded into your tax software was for CA tax purposes only and not for federal purposes. Does the gain show up on your federal return Schedule D? On your CA return?
One correction to my original post. I think the report I downloaded (shown in the screenshot in my original post) was actually a Report for 1099-B, not the actually 1099-B. The report was created by GAINSKEEPER, I think TDAmeritrde uses that to track stock transactions. I'm not seeing an actual 1099-B under my acct.

If I understand this TDAmeritrade webpage correctly, it means they did not file a 1099-B to the IRS, see screenshot below says "No Tax Document" for my account. Then somewhere down below the same page, it shows the 1099-B summary/detail reports by GAINSKEEPER.

Is my understanding correct?
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