Under the law, brokers report cost basis both to taxpayers and to the IRS. Conlon called the cost basis law the most challenging reporting rule since the IRS began requiring employers to inform the government of each employee's wages.
"It will be interesting to see how the IRS uses this," Straus said. "Will they go after the guy with 100 trades and two that don't match?"
Companies are spending an estimated $528 million implementing the regulations, said Arsalan Shahid, program director at the Financial Information Forum, a group that represents broker-dealers and other companies that provide financial data.
Brokers including Charles Schwab Corp., TD Ameritrade Holding Corp. and Vanguard Group Inc. started educating clients last year about the changes, the companies said.
Schwab sent about 1.8 million clients redesigned 1099-B forms with cost basis information this tax season, said Brian Keil, director of cost basis and tax reporting for the San Francisco-based company.
Trickier cases involve so-called wash sales, when taxpayers sell shares at a loss and buy within 30 days on either side of the transaction. In those instances, the loss is generally disallowed by the IRS and added to the cost basis of the repurchased shares.
Stock Splits, Spinoffs
Brokers also must adjust basis information to reflect stock splits, spinoffs, mergers, name changes and other corporate actions.
The task becomes more complicated when accountants must combine reports from multiple brokers onto never-before-used forms for tax filing.
The adjustments for wash sales are particularly difficult to understand, said Steve Rosenthal, a visiting fellow at the Tax Policy Center in Washington who said he had trouble reconstructing the calculations on his own forms.