First day for me on board at ET. I am fumbling with the SEARCH function and not helping myself. This had at one point many years ago beenaddressed ad nausea because of new rules and the divisiveness of opinions at the time, just as I had to take a hiatus from trading. How did the following subject get resolved please ? I just started trading again stocks weeks ago, and I expect stock options, too, doing the former at high volume monthly. I am getting mixed messages from what appear to be good sources addressing the issue from web searching. Qtn 1 of 2 Years ago, I took what became a consolidated 1099 b (I think, b) its ending sums of my stock trades and placed on one line of Schedule D what were all qualified for short term. Shazamm...done ! (I did no options then.) Is this still possible today? Virtually all I am finding is to log all trades on Sch D, OR log them on Form 8949 Sales of....Capital Assets from which to sum them and put on a line on Sch D. Is it otherwise still possible to do what I use to do years ago....taking the 1099 ending figures and placing them on one line of the D ? For the line´s date I use to put Jan 1 to Dec 31, 20xx. I never got a filing audit, so probably did not get under an examiner´s inspection on the matter. (Maybe I was examined randomly with no admonishments to me.) H&R Block (no date with the article) states (below link...very short answers) at the last answer it is acceptable the way I did it...not citing hundred of lines of trades for the year..... if I read it correctly: https://ttlc.intuit.com/community/t...-i-still-need-to-fill-out-form-8949/00/612613 Qtn 2 of 2 I am trading with a brokerage using APEX clearing house. I either read or heard its 1099 b will not give sums at the end of its citing the options traded. So I had better keep a log on those ? BTW....One could say with the stocks, I can keep a IRS style log. I could never do that in pen...too many times I would need erasing.....have to use a pencil. I cannot see transcribing over 300 trades into ink for submission. I apologize for the mundane questions. I just wish not to have a problem with Uncle. Thank you so much in advance.
Do not know if you use Turbotax but, if you do, the process with doing your Income Tax is pretty easy. Load Turbotax and download all your transactions when it becomes available directly to your income tax. You have to login to your broker account using your account number and password. All your transactions are downloaded directly, to your income tax return. Nothing to enter and nothing to figure out. Your schedule D is automatically, calculated and the columns filled with the data.
I have been consolidating hundreds and sometimes thousands (2008-9) trades each year into dates of "Various" and just calculating the net p/l for 20 years. The new 1099s make this easier. No audits yet. I'm very sure that my actual tax owed amount is accurate, so that the worst that would happen is I would have to send a phone book-sized 1099 with all the dates and basis info to the IRS and they could have fun adding it all up. They'd get the same numbers. This is just my experience. As always, consult a tax professional as needed. And as small said, you can use tax programs to make this easier if you wanted to follow all the rules exactly.
I think they only care that your taxes tie to the 1099 they receive from the broker. My accountants do “VARIOUS” as well. If it doesn’t tie then you have to make the justification.
Yes, good point. I also make damn sure anything I send in exactly matches the broker's (as far as total P/L). All the IRS is doing, of course, is computer matching everything. If it doesn't match, expect a letter.
^^^^ This! 100% absolutely correct. This small nugget of advice SHOULD be much more readily available online. Unfortunately, almost no broker will tell you this -- because they need to "cover their asses." ex: There are edge-cases where wash sales and such won't be calculated correctly if you have multiple brokerage accounts. But as far as I know, the IRS doesn't dig into those details. If your totals match the totals on your consolidated forms, the IRS probably won't bother you.
Lucky you have not been audited. You have not accounted for those pesky 'disallowed losses due to wash sale'. But your method is fine if you've made the 475(f) election.
Wash sales has been clearly, marked by my broker. I imagine if you are downloading the broker data into your Schedule D directly, it would already be taken care of by the tax software. Turbotax (Intuit) and other tax software companies would have massive headaches if that were the case. I have been using Turbotax for atleast, 10 years so, I do not think there is a problem.
Brokers report wash sales within one account. If you have multiple accounts, it's up to you to reconcile and find potential loss sales that may span transactions among multiple accounts.
If trading is actually a business for you (i.e., you trade actively and often), you may want to file with Trader status. Then you can forget about wash sales, capital loss deduction limits, and more. Study up on it though and consult a professional advisor if you need to!