Q&A with the Pennsylvania Department of Revenue

Why does the Department require exact dates for security sales and purchases?

Jun 19, 2011
Q:

Why does the Department require exact dates for security sales and purchases? Since Pennsylvania does not tax long and short-term gains differently, why not allow “Various” to be used when different purchase and sales of the same security are made?

A:

In some instances, various would not be an appropriate entry for the sale date.  For example, situations where gains or losses might affect the income calculation for a taxpayer using the actual income method for making estimated payments and calculating whether they are exempt from the estimated underpayment penalty would require exact dates of sales.  A deceased taxpayer’s income must also be determined through the date of their death and purchase and sale dates after that date must be excluded from any calculations of gains and losses.  The department sometimes uses online tools to verify purchase price or adjusted basis for significant amounts of gains on transactions.  Although the transactions are rarer now, the department also used the purchase date to verify the item should not have been reported using the D-71, Gain or Loss on Property Acquired Prior to June 1, 1971.

Rather than list out all the exceptions of when various could or could not be used, the department opted to keep the instructions simple and requires the actual dates be entered in all cases.  Although the department has accepted the term various, it does not specifically provide for the allowance in its directions.

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These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.