Hope so! Isn't our goal to remit, say, $25M in estimated tax payments per quarter as a result of trading profits (well, I'll settle for the whole year if it's $25M )??
Thanx for the answer. I will watch for this 1099 form. unfortunately I will get a credit from Uncle Sam. I would love to owe him the money.
Just started trading the emini's towards the end of the year with IB. My statements and records indicate a gain of 4500 gross and total commissions of 500. So my Net Profit is 4k. I received my 1099 from IB today and they only show the gross profit of 4500. How do I report this so that my commissions are reflected on form 6781 showing a profit of 4k. (because the only thing the IRS will see is the 1099 with 4500) I was thinking of just including a note explaining the situation. Anyone run into this before?
this isn't like stock sales where they just report your sales and it's up to you to report your basis. With futures on all 1099s they calculate your P/L for you and that figure is reported to the IRS. In this case they have reported my profits with out including commissions.
Arrrgghh! You're right. I just looked at mine (not from IB) and commissions were factored in. Only thing I can suggest is contact them immediately and demand a corrected 1099. If you want (or need) to file before that, your idea of attaching a note (maybe with copies of statements, if feasible) should work. Geez, you'd think they could get this straight, it ain't rocket science.
I called the IRS and finally got to someone who knew something. The answer is simple and what I figured they might say. Attach a note stating why the figures you put on form 6781 are different than what IB's 1099 says.
Based on what I've heard from interviews with former IRS auditors, I still contend that IB does a dis-service to its customers by reporting differently than every other broker. From what I've heard, returns get "kicked" to a human for examination based on an "audit score" generated by automated systems. The more discrepancies that are found between what you report and what's reported to them by others, the worse your score is. If the auditor doesn't immediately understand the problem, or finds other things questionable, you're in for a tough time, even if you've been completely clean. Why can't IB just make it work the same way as other brokers, and how the IRS expects to see it?
Good thing I saw this thread. I knew that IB reported futures profits gross of commissions and I even called their customer service to complain about that when I got my 1099. But when I saw this thread I couldn't remember how I accounted for the commissions in my tax forms. I checked my taxes over again and, sure enough, I had forgotten the commissions. Since I had already filed electronically, I had to do an amended return (which is pretty easy with Turbotax). Fortunately I hadn't filed my state return yet. It would have been really stupid to pay income taxes on commissions. Talk about adding insult to injury! Aaron Schindler Schindler Trading