Incorrect 1099 or this is only way IB will do it

Discussion in 'Interactive Brokers' started by vm81, Feb 14, 2021.

  1. vm81


    I have TTS and have been trading for a while but never went for M2M accounting. For 2020 I changed to M2M and called IB to tell them about it. I just got my 1099 and its the same way I used to have my old 1099s - with all the wash sales in there. With 1000s of transactions, trying to figure it all out seems very daunting.

    Any idea whats the best way to move forward - will IB give me a 1099 without all the wash sales. I am sure it will also be helpful if thats what is send to IRS so everything matches.
  2. SammyJ


    In the old days the IRS took your word on trades as they only saw the sells. Now the irs gets the full accounting of your total profit and all your buys and sells so i things don’t match up you might get a irs letter. I don’t trade stock anymore but i have a few mtm trader friends bitching about this .
  3. BMK


    I don't think they can give you a 1099 without the wash sales.

    Yes, you may get a letter from the IRS, but if you have properly made the MTM election on your tax return, you should be able to resolve the matter without having to go through a full-blow audit.

    You should be able to download a complete history of all of your trades during 2020 into an Excel spreadsheet. I don't use IB. But the data that you download should have columns that show your cost basis, the sales proceeds and the gain or loss on each transaction. And that body of data, in raw CSV format, should not be adjusted for wash sales.

    You need to attach that spreadsheet to your tax return to support the numbers you report to the IRS. Once you get the data properly formatted, filtered, and organized the way you want it, you should be able to convert it to a PDF. Depending on the tax software you are using, you may be able to attach the PDF to your electronic tax file, so that it is submitted to the IRS electronically with your tax return. If your tax software does not support that type of attachment, then you will need to

    (a) choose different tax software, or
    (b) use an accountant (all professional tax programs support this type of attachment), or
    (c) file your tax return by mail with a paper version of the spreadsheet attached (which I think is a reaaaaaally bad idea)

    TooEffingOld and qlai like this.
  4. SammyJ


    Use trade log . In the old days when i did a lot of stock they were the best as they software is geared for hard core traders. it will download all your trades from almost all brokers and spit out a full mtm summary to attach to your return .
    TooEffingOld likes this.
  5. cant believe no one has opened a IB type competitor yet. IB long past its expire date.
    stochastix likes this.
  6. vm81


    @BMK thank you for your input. I forgot to mention that this is not for my personal taxes. Its for the LLC. Not sure if your recommendation changes. Do you know which tax software will let me attach. I have always used TurboTax for my personal taxes though not sure its best for trader taxes (M2M) under an LLC. Also - I know generally IRS prefers efile and I understand why that is but why do you say its "reaaaaaally" bad idea?

    @SammyJ - I am using tradelog and will probably use them for my 4797 but need to figure out what tax software to use that will let me attach it for LLC tax return.
  7. BMK


    Is is a single-member LLC? Is is part of your personal tax return, or are you doing a tax return for a partnership?

  8. smallfil


    It is all the same. You do not get to deduct any wash sales and those are reported to the IRS so, why does it matter? Do you think the IRS is not aware of the wash sales when they have the same copies of your 1099s? If you do your own taxes via Turbo Tax or have H & R Block do your taxes, the tax software takes care of the calculations. If still in doubt, consult a tax professional. You are not really saving monies by asking other people on a website instead, of a tax professional?
  9. vm81


    @BMK Its a LLC taxed as a S-Corp. I am the only employee
  10. BMK


    Returns filed by US mail take a long time to process and are more likely to encounter problems or errors during processing. This was true even before the pandemic. Under the current conditions, IRS mail processing has almost come to a standstill. During several months of lockdown, most IRS employees were either furloughed or working from home. Mail simply wasn't getting opened. The IRS is now processing mail, but they are still catching up on the backlog. They had to rent massive amounts of storage space for the unopened mail.

    I am a tax advisor. I have a professional license issued by the IRS. Professional trading is not my area of expertise. But I am familiar with most of the basic issues.

    I'll try to answer your question about adding an attachment in TurboTax later this evening in another post.

    #10     Feb 15, 2021