Hey guys, I've been reading up on people that do scalp trading and it's amazing how many times trades are done per day. Now my question is, do you have to break down every single trade on your Schedule D? I use Ameritrade right now and I'm just a position trader and they give me a tool (Gainskeeper) to do my taxes. How do you create your schedule D? Are there any tools out there if you trade that often per day? Also, if you use an accountant, do you just print out your 1099 and your statement history and they create the schedule D for you? how much does that usually cost? Thanks guys
I just list a single line per account on my Schedule D, entitled "Various" => then I combined the total cost basis for all trades, and combined sales proceeds for all trades in the columns that follow. I've done this for 6+ years and haven't had any problem with this method. -Eric
Does your broker give you your total basis cost for the year? otherwise, you still have to track down each and every trade right? plus, don't you think IRS wants to find out which ones are wash sales and which ones aren't? Re: trading futures - is the schedule D just 1 line item? no wash sales? Im just beginning to read up on trading futures so I'm in a self-educating mode right now re: futures trading.
do brokers like IB give you the basis cost and the total sells? so you just do a simple arithmetic or do you keep track of every trade you do still but just report the net gain/loss?
I stopped receiving monthly paper statements years ago when they started shipping them in boxes on big freight trucks. So if I were to file every trade on a schedule D it would have to be boxed up and sent to the IRS via truck line and removed with a forklift. Do you think this would cause an audit? HA! I always did the robert green method and put one line on my schedule D. Never got audited and I have heard that it doesn'y increase your odds of being audited. Now if I was audited then of course I would have to recreate the schedule D (which I always do anyhow, electronically). I am not saying that an audit is easy, but man EBO if the IRS showed up on my doorstep asking about schedule D I would just hand then an excel file and a password to access my prime broker's statements directly. It would take me five minutes. If it took 20 hours for you to put your schedule d together for the IRS, how did you come up with the number on schedule D? Probably the first question that popped into their heads as well!
the IRS won't just take a statement if they audit you though, right? they'll probably tell you it's your problem but they might still want the sched D. I didn't realize you can just add 1 line item though. Same question though, how did you calculate your Overall Basis cost for the year? Did your broker provide you with a number much like they do for the 1099 total sales value?
If you elect Mark to market, or get licensed do you still have to list all your trades? Or does either or both allow you to show as an agregate at tax time?
I just let Gainskeeper to formulate a Schedule D for me. It automatically calculates wash sales and what not. I've been told that IRS has no interest in seeing line by line transactions for the whole year.