IRS claims I owe $5000

[loyek590]

the tax code is an abomination.

almost certainly you failed to properly fill out the form.

i spend way too much time on making sure my taxes are right, always do it myself, and have never had a problem.

no, that's just not true, In my case all the cost basis numbers were printed on the form I filed. I just simply read the numbers off the return to them and they adjusted their mistake.

The girl was a real bitch, she kept dogging me because I wouldn't round up or down. Like I would say, "32,248.23" and she would say "Just round down, that's 32,248."

According to them, every mutual fund I sold had a cost basis of zero. And I imported from Vanguard directly to turbo tax.

 

[lindq]

I put "trader" on the front of the 1040 form. This is been my only source of income and I have been doing it full time. But I didn't do that many trades because I was practicing. Do I have to convince them I am a day trader? Also, the notice they sent me was for 2012. So, I assume they would try to nail me for 2013 and 2014 also.

On your future tax filings, put "Self Employed" or "Unemployed" instead of trader.

 

[loyek590]

On your future tax filings, put "Self Employed" or "Unemployed" instead of trader.

yes, maybe, but that is not the reason for his 5k bill. It has nothing to do with getting red flagged for filing as trader. When I started out I always filed as trader, no problem. Now I file as unemployed. But I still got hit with a big bill because the IRS thought my cost basis on everything I sold from one mutual family was zero. It was fairly easy to straighten out. But the bill came about two years after I filed. I keep waiting for another bill for last year or this year, but so far it hasn't come. Maybe somebody finally got their act together. I'm still not sure if it was Vanguard, Turbo Tax, or the IRS. My cost basis was printed on my return.

 

[Arnie]

I don't think your status as "trader" matters. Most likely you did not report the correct cost basis. Go to an accountant and have him take a look at your return. Same thing happened to me a few years ago. IRS said I owed over $60k. It was cleared up with a phone call and corrected cost basis sent in.

 

[loyek590]

I don't think your status as "trader" matters. Most likely you did not report the correct cost basis. Go to an accountant and have him take a look at your return. Same thing happened to me a few years ago. IRS said I owed over $60k. It was cleared up with a phone call and corrected cost basis sent in.

+1 (except the part about going to an accountant) I used a CPA the first year I started trading, never again.

 

[stockmarketfan]

No, you better have trader otherwise you will be hit with wash sales

 

[Bob111]

Yeah, but as I said-typing "trader" in 1040 doesn't make you a trader. Proper election will, but you know the requirements, right? Wash sales aren't big deal even for VERY active day trader.

 

[stockmarketfan]

my accountant handles that stuff..I once got a summary saying I made like 2 million dollars bc of wash sales, but i really lost money that year..

 

[stockmarketfan]

I do over 500 trades a day, im a trader..my stuff get submitted via a dvd rom to the irs as its too many pages to print

 

[jodistrict]

In 2012, I scalped USO and SLV a few times. At the time, I thought these were regular ETFs, and had no idea of the tax complexity. They don't report the basis to the IRS, so the IRS assumes that the proceeds are your profit. This is turning into a tax nightmare. Whatever you do, do not trade commodity ETFs. I received the K-1 form for USO, but not SLV. This was in 2012. Do I need to get the SLV K-1 form before I can correct the taxes? How do I do this?