i agree. actually with the software available now days all you need to do is answer some multiple choice questions and click next.
There is an enormous breadth and depth of information relevant to taxes. I have not yet met a person well-versed in all areas of taxation, so I'm not shocked to learn there is a CPA in the world not familiar with the rules relevant to futures trading. Futures traders, though, probably don't want that person preparing their taxes. Time to find another CPA.
In general, I agree with your comment. It's important to remember, however, that tax software is written with a conservative stance. In other words, tax software will lean towards the IRS's position in areas where there may be room for interpretation.
Excellent advice. Trading is a business, and it's important to understand what you're obligated to pay, as well as when you can carry back losses, what deductions you're entitled to, and how to structure your business to maximize tax savings for health insurance, retirement, etc. I think my CPA is generally pretty competent, but I've avoided around $1,000 in overpayments during the past few years on stupid little errors through careful checking of my returns.
Well this certainly is not rocket science! The instruction for IRS form 6781 are merely 3 pages long and they clear state when each separate transaction needs to be listed. Now, if you are saying you have muddy, gray area that you and your CPA can not clearly distinguish enough if you actually qualify for the net reporting method, or rather if you are required to list each transaction, then that is another matter entirely. If so perhaps that should be the topic of this discussion, rather than broad generalizations when all the facts are not given.
hes just a simple "country" CPA.... i reckon he's never had to do taxes for a trader before. Anyways i wanna thank everyone here for the help.... i will tell him the form that he needs.
That is so quaint, I bet his wife will even serve the IRS auditor Tollhouse cookies and milk next year.
I wish this was so simple. Well...it is for futures because P/L is reported on 1099-B, so there is no need for details (as explained in the instructions for form 6781 - line 1) What about section 1256 contracts that are not futures? for example broad-based index options, futures options or even forex (which could be regarded 1256 contract if you opt out of IRC 988) All of these are not reported to the IRS, so the question remained: Do I need to provide line-by-line reporting? I'll appreciate your comments.
Looking at the same instructions you referred to (form 6781, Part 1, Line 1, found on page #3) the rules seem failry clear that the default is to list each transaction UNLESS you meet the fairly broad exclusion and are allowed to report the net amount found on form 1099-B.