New IRS schedule D requirements
- Thread starter kowboy
- Start date
I have a dumb question. The brokers send you the 1099 anyway. Why can't they save us the trouble and also put it into sched D format? whichever one that did that would latch onto a lot of business.
Actually the 1099-B is NOT acceptable (and the IRS already HAS the 1099-B anyway). What is required is that all sales made in the year (even those not listed on the 1099) are matched to the related purchases; all shorts closed during the year, matched to the related sale.
That said, the brokerage houses are aware of the new Schedule D-1 requirement, and it is likely that some will be sending out the information in a usable format.
In the meantime, hopefully the IRS will issue an annoucement reversing this onerous requirement for 2005.
Here is an article I came across today at
http://www.rothcpa.com/taxupdates.php
SCHEDULE D PANIC ATTACK SUBSIDES
The tax preparation community had worked itself into a frenzy over the instructions for the 2006 1040 Schedule D. The instructions implied that we would have to manually enter each stock transaction on the actual form; to save time, we have traditionally attached brokerage gain and loss summaries when a taxpayer has many stock sales. I suspected that the IRS wasn't really requiring this, based on this part of the schedule D instructions, away from the part that caused the panic:
This passage implies that attached statements of transactions are still acceptable, as long as they have the appropriate information.
The IRS yesterday issued a "clarification" email saying yes, we can again attach summaries like we always have. Tax Analysts reports ($):
"Taxpayers may submit attachments in lieu of completing lines 1 and 8 on Schedule D or D-1 as long as the attachments contain all the required information and are in a similar format," the document says.
The additional language was intended "to remind investors that they must include ALL transaction information required by Schedule D," because some investors were submitting brokerage statements that did not include all of the required information, according to the document.
http://www.rothcpa.com/taxupdates.php
SCHEDULE D PANIC ATTACK SUBSIDES
The tax preparation community had worked itself into a frenzy over the instructions for the 2006 1040 Schedule D. The instructions implied that we would have to manually enter each stock transaction on the actual form; to save time, we have traditionally attached brokerage gain and loss summaries when a taxpayer has many stock sales. I suspected that the IRS wasn't really requiring this, based on this part of the schedule D instructions, away from the part that caused the panic:
This passage implies that attached statements of transactions are still acceptable, as long as they have the appropriate information.
The IRS yesterday issued a "clarification" email saying yes, we can again attach summaries like we always have. Tax Analysts reports ($):
"Taxpayers may submit attachments in lieu of completing lines 1 and 8 on Schedule D or D-1 as long as the attachments contain all the required information and are in a similar format," the document says.
The additional language was intended "to remind investors that they must include ALL transaction information required by Schedule D," because some investors were submitting brokerage statements that did not include all of the required information, according to the document.
traderstatus,
I got a question on the Sch. D. If you traded stocks, futures, and options what do you put on line 2 and 3?
"Line 2: Enter your shor-term totals, if any from Schedule D-1, line 2."
Is that the total NET gains or losse? Where is the Schedule D-1? Is that a separate form? I'm using TraderLog. And I'll just submit my multi-pages of every trades and just put see attached sheet on Line 1. Is that sufficient?
"Line 3: Total short-term sales price amounts, Add column (d) of lines 1 and 2 ?"
What happens if you traded various securiites and asset classes how do you figure what the total sales price amounts were? Or this agian the net gain/losses?
I'm confused.
thanks in advance!
99
what does that mean? does it mean that you must still send them every trade which could be 2000 pages? of does it mean you can stiull summarize the totals for each broker in one line? i assure you nobody who does 500k trades will do anything but summazize. the truth is a one line summazring was never approved by the irs ever but most huge vol traders did it anyway. the bottom line is the one line summazation is the cleanest and msot accurate form of accounting for day traders who make the3re living trading and trade 100k trades a day and haver mtm trading i assure you they can still do one line acocunting