New IRS schedule D requirements

Discussion in 'Professional Trading' started by kowboy, Jan 7, 2006.

  1. kowboy


  2. greddy


    Does this apply to YM traders as well? On the CBOT website, it mentions in one of the articles that YM transactions only need to be reported as a single line, and details are not necessary.

    In any case, this new requirement sucks. Some daytraders will need a box to mail their tax returns.
  3. Kensho


    There is no way I'm going to account for every single transaction. I'd like to see them asking any other business (say Walmart) to account for each transaction. They can waste their resources on auditing me if they like. For independent traders, simply stating your net PL for the year and sending your brokerage statements is enough, any requirements beyond that is just harassment.
  4. Nothing changes .... simply ship them the summary and then if they want to ask, let them.....then ship them a stack of paper in ten boxes that they can stack to the ceiling and review ... LOL.
  5. nkhoi

    nkhoi Moderator

    that will translate innto a truck load of papers for some traders, I think I will use the smallest font I can find to file them papers.
  6. If you file as a trader status with MTM. You daytrading trades go into Form 4797.
  7. You may have missed the point - The instructions state (as you've shown above) not to use small fonts on an Excel Spreadsheet (for example) and then writing "see attached" on the actual IRS tax form.

    The brew ha ha is that IRS (under penalty for non-compliance) is moving towards requiring that each sale to be listed on a separate physical line on an actual approved IRS tax form Schedule D-1.

    There are exceptions for the time being from this new written instruction, but the fear is that IRS in moving in the wrong direction and this needs to be nipped in the bud.

    Call your congressman and complain.

    One of the exceptions for now is as crazy_trader stated, M2M traders use form 4797. The instructions for that form require (for example) "see attached" on form 4797 and then attaching an Excel Spreadsheet or Broker provide gain loss detail report.
  8. Htrader

    Htrader Guest

    If this rule stays in effect, it will be more time consuming but managable, even if you have thousands of transactions, like myself.

    I'll tailor my excel spreadsheet to specifications that exactly match the D-1, and then print my trades directly onto blank D-1 forms.
  9. just elect mtm. mtm is only one line with no wash rule problems. obviosuly mtm or not no huge vol trader will ever post every line
  10. Commodities and futures such as broad index futures such as the YM are classified as section 1256 income and can be reported as net.

    #10     Jan 7, 2006