A Hard Lesson About Taxes And Getting It Right

Quote from larrybf:

HOODOOMAN..............your idea is a great one..........i been at this game for years and never thought of something so simple....THANKS
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i do it slightly different. i open a new form in my prior year turbotax and call it 2006 preliminary. then at the end of every day i enter my trades right into turbo tax. at year end you print out that schedule d and just transfer the numbers. its almost foolproof.
i also enter interest and dividends as i recieve them. you can also estimate your other numbers based on the prior year and enter them. that way you know almost exactly what your yearend taxes will be every day
 
Quote from hoodooman:

Get blank schedule D's and fill them out at the end of each trading day. At the end of the year white out the old date and fill in the new date. Copy and send the IRS the copy. Works for me. Also check it twice.
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Would it be possibe to create a Schedule D template in Excel and then cut paste from the brokers daily record of trade executions onto the Excel template?
 
Tradelog pumper....you (as predicted) ignore my questions. And then played the panzy game of claiming ignorance to an excel spreadsheet while you claim to conduct hundreds of trades per year.

Well, if you have the ability to click "buy", you can certainly build a spreadsheet and record your trades. Yes, believe it or not "YOU" can do it!!

And it costs nothing!!!

So again I'll ask....exactly what were the errors that promted an $86,000 tax bill??

Please, please, please.....I don't want this to happen to me, but I don't think tradelog will help.

Only you can help me by disclosing your "errors".:cool:
 
Quote from eagle488:

Every year, I always do my own taxes ever since I started filing returns many many years ago. Why? Because Im stubborn. Just like to do these things on my own. It does take a while. . .

Where was the screw-up? Schedule D. There is so much room for error in doing Schedule D on your own, it needs no explanation. I pride myself on being able to tear through it and getting it right. However, it wasnt right this time. There were a lot of trades on that Schedule D...

Next time, I will use the Tradelog software instead of going at Schedule D on my own...
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So it appears that IRS can check the accuracy of your schedule D.
Does anyone know if your brokerage report cost basis to IRS?
 
Quote from eagle488:

Every year, I always do my own taxes ever since I started filing returns many many years ago. Why? Because Im stubborn. Just like to do these things on my own. It does take a while. . .

Where was the screw-up? Schedule D. There is so much room for error in doing Schedule D on your own, it needs no explanation. I pride myself on being able to tear through it and getting it right. However, it wasnt right this time. There were a lot of trades on that Schedule D...

Next time, I will use the Tradelog software instead of going at Schedule D on my own...
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take your proceeds reported by the your broker, subtract gains and you have you basis cost. put those 3 numbers into schedule d along with your broker name and acc# and you done. one single line on Sch D
work for people i know for last 5 years.
 
Quote from NanoTick:

So it appears that IRS can check the accuracy of your schedule D.
Does anyone know if your brokerage report cost basis to IRS?
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AFAIK what gets sent to the IRS from your brokerage is procedes from Stock Sales only. You have to give them your basis for each and every sale.

As of right now, I have logged 1665 trades this year. With the recent volatility (finally) I expect to go over 2000 trades again this year. And I'm just a part time system trader...

Sending the IRS a phone book-sized Sched D has never seemed like fun, so I "net out" all stock, option and future trades to just get 3 cost basis'. Yes, I know...this does not follow the rules.

But I do log every trade in a spreadsheet, so if I'm called on it I'll crank it all out. Would suk bigtime tho... :mad:

But I know that my taxes are correct and there certainly never is intent to not pay my share, only to save hours of work. :cool:

edit: Basically, exactly like Bob is suggesting. I've done it for about 9 years. Hope I can keep doing it too...
 
Don't you guys pay your taxes quarterly? If you under-estimate you can always amend your quarterlies.

As far as trading, doesn't any serious trader keep an excel spreadsheet, not only for tax purposes, but to make sure that there trades match with their broker? I print out my sheets and put them in my file for three years. I don't care how thick they are. I have 2006 taxes...2005 taxes...2004 taxes...and 2003 taxes in one of those plastic crates from Office Depot.

Excuse me for being Mr. "Goody-two-shoes" for posting what seems to be responsible...but this is what I do...I must see each day if what I think I made or lost is what my broker records. I actually update my spreadsheet after each break following the trade(s) to keep up with it. If there is only 5-20 trades a day its a piece of cake...

I trade Retail Spot Forex and will be getting back into Futures soon, but I would do this for anything I trade.

Michael B.
P.S. I am sure one of the traders can post a template...
 
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