Document every trade detail to the IRS?

DataCruncher · Mar 28, 2008

Quote from TheAngryHermit:

I have H&R working on mine as we speak. I started trading in Dec. '07 and ended up with over 400 trades last year. It's been a nightmare for H&R, though. A lot of forms needed aren't in H&R's system. Hell, some documentation that needs submitted is a handwritten letter, there is no form available from IRS.

I'm not sure if he was able to put my trades on Part II of Form 4797 or whether he had to put them on Schedule D.

I'll let you know more when I pick up my taxes today.

Anyway, here's how complicated taxes are for active stock traders:
http://www.irs.gov/taxtopics/tc429.html
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i thought you gotta declare MTM status to use 4797. H&R block is not an expert on these matters

Surdo · Mar 28, 2008

Quote from TheAngryHermit:

I have H&R working on mine as we speak.
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DO NOT use H&R Block, you run the risk of being audited!
Hire a dedicated CPA that exclusively handles trader's accounting, or has done active trader's returns before. No need to use one of these mills that "specializes" in forming uneccessary entities either!

el surdo

Bowgett · Mar 28, 2008

Quote from HotTip:

I usually just put a lump sum on my schedule D/4797 with a footnote saying "detailed trades available upon request", but I think I read somewhere (maybe Green Trading or something) indicating that the IRS is clamping down on traders so report all individual trades on your return. What are other traders doing? If I did this my return would be over 700 pages.
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I once mailed them my return which looked more like a book

greddy · Mar 28, 2008

Quote from brocklanders:

Not if you trade futures only. 60/40 baby.
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Futures trading is great. Just one line, no detail.

Bowgett · Mar 28, 2008

Quote from DataCruncher:

what is the limit on the amount of trades you can e-file with TurboTax
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5000

TheAngryHermit · Mar 28, 2008

Quote from Surdo:

DO NOT use H&R Block, you run the risk of being audited!
Hire a dedicated CPA that exclusively handles trader's accounting, or has done active trader's returns before. No need to use one of these mills that "specializes" in forming uneccessary entities either!

el surdo
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I've been audited plenty of times. No big deal. Besides, my tax guy at H&R is their senior tax advisor and is retired from Smith Barney. If he does me wrong, I'll be back here to admit I was wrong...

Anyway, GreenTraderTax.com is a ripoff IMHO. I'd have pay several thousand for them to do my taxes. Not going to happen.
http://www.greencompany.com/Traders/TraderTaxPrepCosts.shtml#retainer

monstercat · Mar 28, 2008

250k trades min this year and 1 line. i also use software to download all but never have sent them in and never will. if they ask then i'll send them