InteractiveBrokers 1099 vs 2006 Annual Statement

I have a substantial discrepancy between my Interactivebrokers 1099 P/L and 2006 Annual Statement P & L. one figure is about 60% larger than the other, so I'm not talking 'minor'

On their tax page is says:

"Please note there may be discrepancies between your Gain & Loss Report and your 1099. We are currently investigating issues relating to exercised options and transfers of short positions. We plan to have these items resolved by Friday April 6, 2007. Interactive Brokers is not responsible for any reporting discrepancies with the Gain & Loss Report and it is the customer's responsibility to check all details on this report. "

although I believe they are talking about 1099 vs schedule D tax form, which for me were fairly close

My discrepancy is between the 2006 annual statement & the 1099

I ended 2006 with no positions, so it's not a matter of mark-to-mark P&L of positions held at 2006.

Any thoughts on this? Anyone else finding the annual statement not matching

 

'I ended 2006 with no positions, so it's not a matter of mark-to-mark P&L of positions held at 2006.'

should be 'of positions held at end of 2006'

 

Did you trade any equities in 2006?

 

yes, equities and futures

 

You traded both equities and futures. You incorrectly refer to your "1099 P/L". Your 1099 for equities does not give a profit or loss of any kind. It gives only the proceeds from sales of stocks. If you bought a stock for $101.00, and then sold it for $100.00, thereby losing $1.00, your 1099 for equities will include only the $100.00 you received from selling the stock, and it will not include the amount you paid to buy the stock, and it will not compute the profit or loss from the trade.

 

that was true up until i believe, last year, InteractiveBrokers DOES place '11 Aggregate profit or (loss)' on their 1099s now.

do you have an interactivebrokers account? look at box 11 on your 1099

 

Take a look at the 1099-B "Instructions for Recipient". You'll see that Boxes 8 through 11 apply only to Regulated Futures Contracts.

Box 2 specifically excludes "Regulated Futures Contracts".

Boxes 8 thru 11 are indeed Profit/Loss. Box 2 is aggregate sales. Your Schedule D should come close to matching the total sales (I'm not going to get into the exceptions) but the profit or loss is determined by you. IB's Schedule D-1 is a best guess and includes sales (like options) that are not reported in Box 2.


Jack

 

I have a similar problem with my equity trades. On my 1099-B I got a total sales proceeds, but then there is a "SUPPLEMENTAL TAX INFORMATION" which lists all buy transactions. Using these information it shows a profit that's more than twice what I actually made. I'm a day trader and there is no mark to market issue.

Will this huge discrepancy be a certain cause for an audit?

 

Not necessarily a certain cause for audit for everybody provided that the tax filers have furnished IRS with good explanations for the discrepancies. Especially if your tax return is relatively complex, you might want to talk to your CPA.

 

I don't think you are describing an IB 1099-B.

Some brokers combine a bunch of information in a single report to you. They will include the various 1099's, one after the other. Look carefully at the "Supplemental Tax Information" section. Does it have any IRS number associated with it? Probably not. Your broker has probably provided you with a list of all purchases you made to assist you. If you were covering shorts it can be a confusing listing until you understand what they have done. They do not report equity purchases (piecemeal or in aggregate) to the IRS, just aggregate sales.

Jack