Daytrading and tax filing ??

Discussion in 'Taxes and Accounting' started by moehonker, Apr 9, 2009.

  1. Are there limits to the number of day trades one can do if they are above the $25k min cash in acct and trading a margin acct?

    Also when you report your profits when filing taxes do you have to list each of the hundreds/thousands of trade you do during the year or just report the net profit or loss (up to $3k of course)?
  2. There's no limit to the number of trades.

    $3,000 is the maximum that an individual can deduct for losses. It has nothing to do with your reporting of your trades.

    Some here claim that they just report their net dollars traded and that the IRS accepts it. If your broker doesn't provide it, it's no big deal to get an accounting program that takes care of everything and prints a Schedule D for you - assuming you trade heavily, otherwise you can do it in a spreadsheet.
  3. You don't need to provide any transaction details for futures or forex. For stocks, you are suppose to report each individual trade. I have done this in the past by tracking trades on a spreadsheet throughout the year. On the Schedule D, I just list all short term trades on a single line and reference my attachement. Same thing for long term trades.

    I think you're also safe doing the above but not providing an attachment with the details. Just say details available upon request. Worst case is they ask for it. Just be sure you have it when you file your return so you aren't scrambling for it when asked.