Tax question

Discussion in 'Taxes and Accounting' started by young_economist, Feb 8, 2008.

  1. Hello, I recently received my 1099 statement from my broker and I had a question.

    It has my gross proceeds as $20,522.33 which i understand is the sum of all the trades of the year.

    I funded the account with $2,500 in Jan. 07, I ended the year with $133.43. So I lost $2366.57 on the year even though at one point in time I was up to around $6,000 in the account.

    My question is: I am 19 and have no other source of income so normally in my situation I would not even be filling a tax form; however, do to my endeavors in stock trading last year, must I file a tax form even though I lost money and had no income gain?

  2. GTC


    You need to file both federal and state tax returns for your own safety. Your broker already sent IRS how much proceeds you had in all of your stock sales. If you do not file, IRS is free to assume that you made up to $20,522.33 and therefore owe taxes +interests (if you do not file in time). Besides, you also need to to report any reportable interest you received from your broker as an income--even though our interest expense could be higher than interest received unless you qualify for itemization. Be careful of getting and taking any tax advice in Internet.
  3. I understand they send in the proceeds. My confusion lies in the fact that as a whole I lost money on the year and had no income. I looked at my 1099 from etrade which is where I transferred my account to mid year and they have listed the losses and proceeds and says in caps NO REPORTABLE INCOME; however, scottrades 1099 (where the account first was) does not list losses. I guess I'm just confused at how I could owe taxes when i started with $2,500 and finished the year with roughly $134.

    So in reality I need to file to show the IRS that the loss occurred.
  4. GTC


    You need to convince IRS by filing your taxes with proper forms that you actually did not make enough money after all. Currently IRS knows you got $20+k sales proceeds from one of your brokergage firm and x amount from your sales from your other brokerage firm(s). has the information you need. Sctttrade, Etrade can explain the forms that were sent to you by them---but cannot give you the tax advice.