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Additionally, certain types of income, such as proceeds from renting out property like a vacation home, often require self-reporting since no specific form automatically reports them. It's crucial to keep meticulous records of all income sources and ensure that every piece of income is accurately reported.
2. Investment Transactions
Selling investments is a taxable event, and the IRS is particularly vigilant here. You must report when, what, and how much you paid for your investments, as well as when you sold them. Financial institutions often provide 1099-B forms reporting these transactions, but you're responsible for including any sales not captured on these forms.