So much for the Paperwork Reduction Act I have NEVER had a client audited for not providing a detailed Sch "D". As others have mentioned, a total which ties to the proceeds on the statement from your broker and the back up on file for the detail is sufficient. If the IRS wants to audit that portion of your return, send them the supporting detail for the trades....... end of story. Later, Cracked
Cool, good to know summarizing passes. I guess if everybody does it this way they can't audit everyone. I've heard stories of people getting conflicting info from the IRS so this doesn't surprise me. Summarizing sure does make expensive offers like Gainskeeper look obsolete. LOL I never thought Gainskeeper was a good deal anyway. I'll probably just keep showing the detailed trades using Quicken, it's easy enough.
According to several better known Trader CPA's, you must attach at least a list of Buys and sells. You DO NOT have to actually enter hundreds of trades on a Schedule D. I do not personally deal with the wash sale rule. Some traders do that are not MTM traders.
This is after tax season is over, but here's what I did with about 400 trades for 2002. IRS has a Schedule D-1, which is a continuation sheet for Sched D, many more lines. I used it as a format to create Excel worksheets for short-term and long-term transactions. I do my taxes in TurboTax, and printed out the worksheets and entered the bottom-line numbers into the Sched D. (TurboTax wants you to import all of the individual trades, didn't do that, just entered the totals). Then attached my own D-1 worksheet printouts to the return. BTW, the clearing firm for my broker is Penson Financial, and they have GREAT reporting and data extract capabilities. You can export trade data in a QIF format for import to Quicken. They also have a "tabular" data extract function which gave me all the detail lines for the D-1 worksheet, just needed to create the calculation columns and formatting. However, I'm looking forward to joining a prop firm in the near future and eliminating the whole problem. Gary
I've always just listed total buys and sells for each of a handful of accounts, and had no problems. Last year, they questioned a couple other things, and it turned out they were right, but they still didn't ask for backup for Schedule D. There are easily thousands of investors and non-pro traders for whom a detailed Schedule D would run thousands of pages. It's unlikely that they send them in, or that the IRS would care to handle that much paper. Any more than they would want businesses to submit every receipt for business expenses. I would be suspect of a tax professional that insists otherwise.