Losing money on day trading

Discussion in 'Professional Trading' started by alosito, Mar 8, 2006.

  1. alosito


    Last year lost a lot of money on day trading. I was using Interactive Brokers to complete trades. Was I supposed to track every single transaction for tax purposes to be able to write off some of that loss? The 1099 from IB shows that I actually had some income. How do people make up taxwise for some of the money they lose on day trading? What is the maximum you can write off every year?
  2. dude if you're asking you should be talking to an accountant. I recommend Robert Green (greentaxtrader.com) but there are plenty of others obviously. His company offers software that will process all your trades and generate the Schedule D, but other companies offer it too.

    In terms of write-off if you're not using mark-to-market you can write off $3000 a year and carry other losses over to future years.

  3. if you were trading stocks log on to your ib account and get the buys and sells under account management. probably in your case you can deduct 3000 loss per year against other income or carry it forward to offset future trading gains.
  4. alosito


    Is there software for Schedule D that would be compatible with the data that IB provides?
  5. Just to add to this post re: 3K loss claims -- that's if your trades aren't wash sales.

    If you are a non-day trader (as defined by the IRS), and if you lost money on XYZ, then immediately bought it and sold it again within 30 days, you cannot claim the loss. That's considered a wash.
  6. alosito


    bump :p
  7. download to quicken or ms money then upload to turbo tax. warning there are sometimes mistakes if shorting is involved.
  8. not exactly right. if he had a long that he sold for a loss then immediately bought it and sold it within 30 days it would not be a wash sale. it would be a legit closed transaction.
    if he sold it to book a loss and bought right back within 30 days and HELD it it would be a wash sale.
  9. robbob


    I've been using tradekeeper the past few years to generate my schedule D from my IB statements (http://americanware.homeip.net/tk/)
    Has worked pretty well and is resonably priced.
  10. Machron


    Yup, $3000 a year.

    #10     Mar 12, 2006