I'm not a professional trader, or even a profitable one, but I make enough trades for it to be time consuming to have to enter each trade individually on my tax forms. I have accounts with IB and Tradestation and have been using Turbotax for several years now. Neither IB nor Tradestaion data can be directly downloaded to Tubotax. Is there a way to use Turbotax without having to itemize each trade manually? Since IB supplies a schedule D worksheet, can I simply refer to it as a supplement when filling out the tax form? Can I do something similar for Tradestation, since they supply a 1099-B that shows all of my trades for the year? As far as wash sales go, is it true that if I had no trades in December 2008 that wash sales will be moot? Thanks for any help.
In IB, go to account management/reports and then "tax forms" One of the selections for output format for the Schedule D worksheet is for Turbotax TXF. You save it somewhere on your computer and then import it into TT. Just did it yesterday lol.
the irs has put out a ruling that says they expect every trade to be listed. many people just list totals and get away with it. its your choice. "As far as wash sales go, is it true that if I had no trades in December 2008 that wash sales will be moot?" no.
Maybe. If you sell stock at a loss and buy substantially identical securities within 30 days before or after the sale, you have a wash sale. So if you closed your entire position in November, it's not a problem. You may have wash sales but you won't have to carry the loss forward to 2009. If you bot replacement shares within 30 days of taking a loss, the loss is disallowed and is added to the cost basis of the replacement shares. If these are carried forward past the end of the year, you have a problem.
Yes IB now gives you a pdf sched D (thanks IB!). Make sure it is correct and print and attach to your return. That being said, for about 10 years I have been just doing the "net trades" thing. Working PnL to create a basis for the reported "Total Sales". It's a little nerve wracking with 2-3 thousand trades and 13million in sales (had to break it up for Turbo Tax). But I file electronically and I'd rather not send in reams and reams of paper listing every trade, dates, basis, etc. I do keep a copy of every thing in a spreadsheet, tho. My returns have always been accepted and never questioned, and I believe I can prove every single cap gain reported. But also as others have mentioned, the IRS expects all trades listed so one of these days I may get nailed and have to do it The Hard Way. Keeping my fingers crossed!
Thank you Steve. Using the IB .txf file saved me a lot of time. Now waiting for Tradestation to do something like that......won't hold my breath. Reguarding wash sales: My last transaction for the year was on December 03, 2008, and was a profitable trade. I didn't hold or trade any equities after that. Will I need to consider any wash sale calculations?
In and of itself, profitability of a trade does not guarantee that it's not a wash sale violation because there are more factors involved in carry forwards.. But given that you held no equities after that date and you did not trade in those equities for 31 days, you have no problem.