tax question

Discussion in 'Taxes and Accounting' started by jason556, Jul 23, 2006.

  1. jason556


    I'm a full time trader, last year I had a profit of 30k thru rebates on commissions, was getting rebates for adding liquidity - instead I was taking away liquidity, was a software bug so I had to return the money to the broker.

    In brokers clearing firm website under "Cash History" it shows up as ECN/SOFTWARE FEE CORRECTION -30K USD

    Form 1099-B "Gross Proceeds" is showing 30k gain, money which I returned, is there any way to deduct this ?

    I haven't filed yet for 05 - Penson is the clearing firm.
  2. Surdo


    1. I hope you are on extension
    2. It is your right to receive an ammended 1099 from penson/broker.
    3. Not a bad idea to hire a competant CPA.
    4. You may not owe tax, but you have to file or it will bite you in the ass later.
  3. jason556


    yes i'm on extension
    by amended you mean I should ask penson to issue a new 1099 for me ?
    no i don't own any tax
  4. Surdo


    A "CORRECTED" 1099 from the broker is your right as a customer.

    The IRS may decide you owe the tax if the copy they have says you made $30K. You will need to prove to The IRS it was a broker error, and have the paperwork to back it up.
  5. jason556


    also, once I get the amended 1099 form - from Penson - do I then , need to have them send a a re-adjusted copy to IRS besides myself?.

    - can I handle this stuff myself or assistance of a CPA is required?. -ty
  6. Surdo


    I am fairly certain the new 1099 will automatically be sent to the IRS, just use the new information to file the return.

    I am not a CPA, but have prepared a few returns. You really do not need a CPA, just makes life a little easier in the event of an audit. I would just keep all of your paperwork and file a return before August 15th!

    I would not lose sleep over this, just stay on top of Penson or your broker to send you a correct 1099, that way your ass is covered.