Just sharing my experience

Discussion in 'Options' started by spindr0, Feb 8, 2009.

  1. After many years as an investor, I've been seriously day trading for almost 10 years. Each year has resulted in more trading and a longer Schedule D which I have always done myself w/o an IRS problem. Although I didn't prepare my return properly, the taxable amount was correct. IOW, if I had wash sales during the year, if I avoided the underlying for 30 days in January, it wasn't a violation so the taxable amount was the same.

    Last year was a break out year for me in terms of profit and number of transactions. Because I do a huge amount of pairs trading which usually involves 2 or more stocks (group trading?), inherently, many of them were losers. I n my case last year, it was 26% of total shares.

    All of this is irrelevant except that last month, despite having a long list of "do not trade" stocks, I traded 6 of them and opened Pandora's Box. After readings here and at some of the recommended tax sites, I realized that what came out of that box was a cluster f**king nightmare of wash sale paperwork from IRS regulations ... some of my pairs went on for several months with daily trading of multiple lots of differing sizes occasionally flipping from long to short. An accounting task beyond belief.

    After dozens of wasted hours of work last month trying sort out this mess, a week ago I got Tradelog. Because I don't simply trust something because they say it works, I spent the past week (often until midnight after trading all day) breaking all my trades (1000's) out of my self prepared Sched D spreadsheets, doing the same for the program, and then merging them wherever they disagreed in order to verify who was right. In every instance, it wasn't me. And in mere minutes, it calculated everything properly.

    While I read about other similar programs here on ET, I don't have a clue if I picked the best one (cost, effectiveness, support, whatever). I do know that the last thought I had before diving in was that it's only "X" dollars and if it works, the cost would be far less than the mmany hours wasted getting nowhere. This has been an accounting nightmare and that the end result is that I won't have to deal with it again. If you ever get intoi this kind of mess, do the research and take the plunge with some tax accounting program to make your life easier.

    ANote to Sysop: if mentioning a product is a no-no, please delete its name and let the post fly.
     
  2. Please don't delete this thread. I didn't even know such software existed and have been manually going through this hassle. I hope more people response. Please, please leave this thread and/or move it to career trader.
     
  3. sync

    sync

    Could a broker set up their system to handle all this stuff?
     
  4. spindrO...

    Thanks for sharing your experience. I am curious about several things, as I am in a similar situation, if you wouldn't mind commenting further. Have you run reports for the prior years that you did manual calculations and have you found the net numbers to be different. If so, is the difference large enough that you are considering re-filing those years? And, have you elected MTM in your prior years. TIA
     
  5. ALL THIS BRAIN AND HARD WorK

    and you still can't make a lot of money

    doing 20-40% a year at most

    PATHETIC :p

    trade futures old man, step into my world if you dare
     
  6. I checked all numbers. My calcs for all previous years were correct. I made what I made and I paid the correct amount of taxes. With no difference, there's no reason to refile.

    I have decided not to elect MTM status. Net loss dedeuctions are limited to $3,000 per year and since I don't have any of them, refiling to carry back gets me nothing. And after seeing up close how wash sales get diluted if you repeatedly trade the same stocks, with a few exceptions, the magnitude of the issue is not what I thought it would be.
     
  7. Hey RISKFREETRADING! Thanks for stopping by to spam me with your latest alias handle. How are the pyschos with no life doing? Ya know, GODY, GODY2, GODY3, HE KNOWS NOTHING, SYSTEM LORD and GOD JUST GOD? Oops, they're all you. Are you being a good boy and taking your meds?
     
  8. LAtrojan

    LAtrojan

    I only have 200-300 trades a year and I use the Schedule D that IB automatically generates for you.
     
  9. Thanks for the additional info....all the best.