IB Activity Statement Question

Discussion in 'Retail Brokers' started by Btruck, Oct 19, 2007.

  1. Btruck

    Btruck

    I am holding two long term positions (AAPL & RIMM), that I have not sold. With that said I have bought and sold additional shares of AAPl & RIMM via day trading.

    The question: My Oct 11th printable "activity" statement on the first page shows a very large amount as realized short term gains. Mind you I have not sold the orginal long term holds. I contacted IB via web ticket and they say with FIFO accounting rules this is normal. Is this correct/normal for the statement to show these gains even without selling the position?

    It just looks so odd to have "realized gains" on positions that have not been sold.

    Thanks for the help.
     
  2. rcj

    rcj

    Yes, thats the way FIFO works.
     
  3. rcj

    rcj

    Correct.

    You should see the average position value on your trading page.

    Edit. OP took dwn his last post.??
     
  4. Btruck

    Btruck

    I wish there was a way to turn it off FIFO acc., for both TWS and the Printable statements to simplify the record keeping. It was a red flag to see realized gains on a long term position.
     
  5. Btruck

    Btruck

    I will now be adding a seperate account in the near future for long term positions.

    Thanks for the immediate help. Profitable trading to you.
     
  6. GTC

    GTC

    Some other brokerage can handle it even if you do it from the same account. Even if you have IB account, many software can handle tax-lot accounting including your situation. However, if you choose to have just IB accounts and are thinking of submitting IB provided Schedule D-1 to IRS at the year end, then it is good to have 2 accounts with them for IB's and your sake.
     
  7. You can use whatever cost basis matching method you want. IRS allows either FIFO or LIFO for stocks as long as you are consistent. I have the same situation, where I have long term positions and trade around them. LIFO maximizes long term capital gains for me. I just ignore capital gains in my IB statements.

    Martin
     
  8. rayl

    rayl

    Assuming you are subject to US tax code, opening a separate account will not help.

    You are still subject to FIFO (across all accounts) unless you specifically identify at the time of sale which lot you are selling (in the olden days, by sending in the appropriate certificates, but nowadays by specifying the opening date/price).

    But AFAIK, IB does not provide you a mechanism to do this, so this option does not really exist with IB. And actually I don't know that the code requires the written confirmation discussed in pub 550 cited below, but I will defer on that detail.

    And as far as I know, there is no LIFO alternative as a default.

    c.f. IRS Publication 550 (pg 44 in 2006 version):

    ...

    Adequate identification. You will make an adequate identification if you show that certifidend cates representing shares of stock from a lot that you bought on a certain date or for a certain price were delivered to your broker or other
    agent.

    Broker holds stock. If you have left the
    stock certificates with your broker or other agent, you will make an adequate identification if you:
    • Tell your broker or other agent the particu- lar stock to be sold or transferred at the time of the sale or transfer, and
    • Receive a written confirmation of this from your broker or other agent within a reason- able time.

    Stock identified this way is the stock sold or transferred even if stock certificates from a dif- ferent lot are delivered to the broker or other agent.

    Single stock certificate. If you bought stock in different lots at different times and you hold a single stock certificate for this stock, you will make an adequate identification if you:

    • Tell your broker or other agent the particu- lar stock to be sold or transferred when you deliver the certificate to your broker or other agent, and
    • Receive a written confirmation of this from your broker or other agent within a reason-able time.

    If you sell part of the stock represented by a single certificate directly to the buyer instead of through a broker, you will make an adequate identification if you keep a written record of the
    particular stock that you intend to sell.

    Bonds. These methods of identification also apply to bonds sold or transferred.


    Identification not possible. If you buy and sell securities at various times in varying quanti- ties and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Except for certain mutual fund shares, dis-cussed later, you cannot use the average price per share to figure gain or loss on the sale of the shares.