Broker accounting question

Discussion in 'Professional Trading' started by bigpig41, Feb 25, 2008.

  1. Trying to audit my broker's numbers on my account for the tax year 2007 by using an the final balance off account statements for Dec 2006 and 2007. If I'm starting with the broker's account balance at the end of 2006 and trying to come up with their balance for end of year 2007>>>how do I include the Unsettled trades and positions carried over from 2006-2007 and from 2007-2008?? Using only numbers from THEIR WEBSITE for everything.

    I'm starting with end of year 2006 balance and adding my gains from traqding for the tax year 2007 (minus commissions and SEC fees), adding account interest on uninvested balances, and subtracting off margin interest. Can't produce their end of 2007 balance from "THE SYSTEM"

    Broker can't explain the money missing from the end of year 2007 balance and thinks its due to unsettled trades from end of 2006::confused:

    I think that since I'm starting with the 12/31/06 balance and working forward, that any gains/losses on unsettled trades from end of 2006, or position carryover from 2006 that I completely liquidated in Jan. 2007, should be included by the "system" by the end of 2007>>>seems to me that only unsettled trades or position carryovers from end of 2007 balance would matter since I'm stopping the accounting there and that they wouldn't be properly included in that 12 31/2007 number.

    Missing about 19K . Any ideas appreciated
  2. help !
  3. big pig monster cat to the rescue. you had 100% cash on jan 1st 2007 correct? all positions carried over to jan 1st 2008 must be reversed back out to there cost basis.example: you held 2000 vz you bought at $37 and its $42 on dec 31st 2007. since you're not a mark to market trader and haven't taken a gain that $10k gain(vz $37-$42) is not yet a gain and must be reversed off your dec 31st balance. so lets say you started with 50k on jan 1st 2007 and your dec 31st broker balance is 85k.thats a 35k profit. but you must reverse out the 10k vz profit as its not a real profit yet and reverse out interest,dividends and add back in margin interest to get your true gains.a word of advice. theres some cheap sch d software out there that can download thousands of trades in seconds and print out a sch d and are 100% accurate. much easier to use that.JUST REREAD YOUR NOTE. YOU ALSO MUST ADJUST YOUR YEAR END 2006 BALANCE JUST AS I SHOWED YOU HOW TO DO YOUR 2007 TO GET A ACCURATE PICTURE. LETS SAY YOU HELD 2K VZ FROM 2006 TO 2007. LETS SAY YOU PAID $40 AND ITS NOW $37 SO THATS A 6K LOSS. YOUR BROKERS BALANCE ON DEC 31ST 2006 SAYS 45K.YOU MUST ADD THE 6K BACK TO IT TO EQUAL 51K AS YOU NEVER TOOK THE LOSS. YOU HAVE TO READJUST BOTH YEARS YEAR END BALANCES TO ACCOUNT FOR HOLDING POSITIONS OVER TO THE NEW YEAR .
  4. monstercat: thank you for helping................No, at both the end of 2006 and 2007 I had cash AND stock positions that were held over to the new years(2007 + 2008) in the account and on the last day of 2006 and 2007 I had trades that had been done in the last three days of each year that were considered UNSETTLED trades. Over the course of 2007 I did about 2300 round turns of ONLY stocks.

    I'm wishing I could take THEIR computer account balance for the last minute of 2006 and add and subtract the pertinent gains/losses and margin costs and come up with the end of 2007 balance.
  5. read the rest i posted above
  6. the unsettled trades don't matter.your balance at year ends incorporates all those trades the day they happen. if you sell 1k ibm today on your statement in the morning your blance reflects that immediately. settled trades only matter to withdraw the funds
  7. So Monstercat: So the unsettled trades done the last three days of 2006 and 2007 do not matter to the account balance their computer assigns to the account at each year end.

    But I need to subtract losses or add gains that occured when the positions held at the end of each year were closed out for losses or gains in the first two weeks of 2007 and 2008.

    What if one of the end of the year carryover positions at the end of 2007 is still open as of tonight>>>then should I figure in a difference between the price of the security at the end of 2007 as compared to today?