Option trades tax reporting

Discussion in 'Taxes and Accounting' started by turkeyneck, Jan 29, 2011.

  1. How do you report your option trades since they are usually not reported to the IRS on the 1099? I've heard from some CPAs that you'll get an instant red flag if you report something that does not match up with the 1099. So you are screwed either way from underreporting or overreporting. Any thoughts?
  2. Generally, you should report options on Schedule D. There is no way around it. Since they are usually excluded from the Form 1099, you can provide a reconciliation

    Short Term Reported: 10,000
    Less: Option Sales: (1,000)
    Adjusted Sales Total: 9,000
    1099-B Gross Sales: 9,000
    Difference: 0

    I have never had problems before.

    Hope this helps.
  3. morgen


    options traders that means you better get intimately acquainted with Schedule D of your tax return. This is the form where you report your capital gains and losses for the year, and if you¡¯re like most options traders, you¡¯ll have plenty of short-term, and likely some long-term, capital gains and losses to cope with.