Inaccurate cost basis for a stock in a traditional IRA

[chris_harvey]

Hi all,
Looking for some advice.

Many years ago I within my traditional IRA, I bought into a private REIT offering, that subsequently went public. It immediately went underwater, but had good dividends so I kept it. It changed names three times and I changed brokers a couple of times. There's always been an issue with the cost basis transferring between brokers. I'm not sure why, I think it might be something to do with the REIT itself. Recently at my current broker, again there was no cost basis so I asked them to apply one. The original cost basis was $10 and it reverse split in December 2017 3-1 so it became a $30 cost basis. I asked my brokerage firm to apply the $10 cost basis with a 3-1 reverse split, and they duly applied a $10 cost basis (not $30) which I didn't notice when I sold the stock when it briefly went into the black.

I get my 2017 statement and of course it has a huge profit on the stock. Which isn't accurate because the cost basis is wrong. I'm asking my brokerage to change the cost basis and re-run the report so I have accurate statements. But they keep coming up with all kinds of excuses as to why they can't do it, including now demanding all the original private REIT paperwork. None of this they asked for when they erroneously applied the $10 cost basis last year.

So my question is, since this is a traditional IRA, does it matter? It matters to me that I have accurate paperwork in case i'm ever asked to supply it by the IRS at 59.5 when I'll start withdrawing. But from what i've read, with a traditional IRA it doesn't seem to matter how the money grew, what matters is the income rate on the years you are withdrawing the money. Is that right?

My overall fear is that in many years time someone at the IRS will say "hang on a minute, you made a ton of money on that sale, and it's taxable", whereas I didn't and it's only because the cost basis was set incorrectly. The sale doesn't appear on my 1099 composite for 2017. Also not sure if that's correct or not.

Am i being overly worried about the paperwork trail, or should continue to demand the brokerage fix it?

[bd6759]

You'll need to ask this on a USA forum.