Someone asked me why investor could not use broker's gain and loss report. Many brokers provide Gain and Loss report without considering the factor of WASH SALE RULES. Others claimed that their Gain and Loss report is compliant with WASH SALE RULES. Can you trust them? Never! "I only had 5 trades a year, broker could not be wrong, so can I trust broker?" Never! Here is a simple case with 2 trades involved. I placed a Limited Price Order with a broker, e.g. Scottrade. I wanted to buy 1000 shares of XYZ at price of $10. I did not choose the option AON(all or none). Because it is a Limited Price Order, my order was not executed at once. At the day end, I got confirmation that my order was fulfilled by 2 transactions, a 500 shares buy at $10 and another 500 shares buy at $10. 1 week later, I sold 500 shares at $9 with a net loss of $500. Now, I have 3 transactions listed on year end statement. a 500 shares O/L, a 500 shares O/L and a 500 shares C/L. Any broker who claims they have WASH SALE RULES built in their Gain and Loss report, will report that you have $0 capital loss. It is WASH SALE RULES that your $500 loss is disallowed because you have bought 2nd 500 shares as replacement shares. However, this is a wrong result! Your real intention is to buy 1000 shares, the 2nd 500 shares is never an intention of replacing 1st 500 shares for continually holding. In real world, no broker will fix this kind of error for you. Their statement always list multiple transactions when a Limited Price Order executed in several transactions. I use software like TradeMax to alter transaction record downloaded from broker. I use the Merge Transaction function to merger transaction when above mentioned scenario applied. In that case, I will have a 1000 share buy and a 500 shares sell in trades database. Software will generate a Schedule D with $500 loss.
IB will supply you with schedule D /D1 without a problem, actually I dowloaded directly to Turbo Tax. My problem is using Penson/MB, and I have MB trying to work out the details. The download from Penson to Turbo Tax was incomplete without Date Acquired and Amount Purchased or basis. It has been shear aggravation since it isn't easy to change Schedule on Turbo Tax, and we are talking 2 seperate accts and 4-5 pages of D/D1. Even with transfer to Quicken and than TurboTax has been non existent. According to the IRS as of last week, all brokers next year will have to have the ability to submit a D1/D electronically or at least a complete 1099.
about f * time..i'm still scratching my head with thousands of pages of Sch D. to send or not to send....or send just a portion..i have no idea what to do..besides the problem with large numbers in both tax cut and turbotax
Till 2009, IB generated schedule D/D1 sometimes did not fully match the sales proceeds that IB itself reports to IRS--even if you simply trade only stocks with no carry over positions. In 2009, IB CSRs mentioned that the cause of that discrepancy was due to the fact how 2 IB's softwares rounds the numbers. The situation was even worse in the previous years. It is a classic case of how one hand does not coordinate with the other hand in a company. I hope IB fixes this issue in 2010.
Just wanted to let anyone know there is another version of software that will generate a Schedule D and hand the wash sales. It currently costs about $89 for unlimited transactions. The link is: www.tradeaccountant.com
I've been using one that'll do it for way cheaper (thinking $20). How much interest is there in this? I thought there was none. Does options and stocks. My father did it before he came down with Parkinsons. it has a search function and can edit individual trades. It has a wash and non wash print out so you can do both. Visually it looks like shit
That isnt the problem to generate, its the inputing of information. I ended up using Dragon (speech recognition software) to at least add dates instead of constant mm/dd/yyyy and 200 shrs of XYZ, than price, its tedious if you have 10 pages of purchases and 10 pages of sales. MB trading keeps telling me that Penson will change, IB generates a schedule D but isnt compatible with TurboTax. Traderaccounting software is great, and I used it years ago, but as a day trader, I cannot constantly input on a daily basis.
I don't list my stock trades individually on D or D-1. I list the sum total per broker on D and attach the brokers 1098-B. I've been doing that for more than a decade and not once has the IRS taken issue with it. There have been years my D-1 would have been several 100 pages. Hell no. Just put a note, "refer to XYZ Broker 1098-B" and be done with it.