Stock Transaction Tax-Prep Software

Suggest not to print "Sch D" from your broker becos' most are incorrect due to wash sale rule. You will miss significant tax deduction benefit.

I have spoken to CPA's and most do not undersatnd Trader's Tax filling. However, I have spoken to specialty Tax Trader CPA. Recommended Tradelog to prepare Sch D. Believe it or not Wash Sales calculations are very complicated. As an Accountant/Trader, I would never attempt to prepare without specialize tax software for traders.
 
cybercash28, wash sale refers to an activity (buy & sell) to calculate the gain/loss. If it's a gain, it's reported as ordinary income for tax. If loss, it's subject to "wash sale rule" for tax deduction. Please google wash sale to understand the term.

There is no such thing as "wash sale tax".
 
Thanks Sdiegotrader.

Yes, I understand the wash sales rules. I just want to eliminate the 30 days loss rule. Too complex since I trade daily.


I have been searching the internet and learninhg.

I live in Orange County. Are you in SD?
 
cybercash28, yes I live in SD. I know Orange county. U live in Irvine?

You can't eliminate the Wash Sale rule (it's an IRS tax treatment for stock transactions) if you are proprietor trader. However, you can take advantage of mark-to-market tax trader status to convert your capital loss to ordinary loss (capital loss limited to $3K deduction per tax yr, then carried forward or back to deduction against future gains). And, that is another complex area again.
 
Can one file a Sch C as one is doing business as a "trading business"???? Without being designated "Trader Status"??

I know capital loss is limited to $3000/yr but are commissions, fees etc etc counted in the cost basis or are they operating expenses as in other business.


One could lose $9000 but of that have $1500 in commissions, fees etc. Which enables one to have more tax loss carry forward/back.

Does this make sense to anyone, LOL??????


SteveD
 
Quote from SteveD:

Can one file a Sch C as one is doing business as a "trading business"???? Without being designated "Trader Status"??

I know capital loss is limited to $3000/yr but are commissions, fees etc etc counted in the cost basis or are they operating expenses as in other business.


One could lose $9000 but of that have $1500 in commissions, fees etc. Which enables one to have more tax loss carry forward/back.

Does this make sense to anyone, LOL??????


SteveD
More...

I am pretty sure you cannot have a trading business unless you qualify for trader status. And if you do not have a trading business, then you cannot write off expenses on Schedule C. Commissions are counted in the cost basis regardless of whether you have trading status or not.
 
Your trading expenses are classified as investment expenses and deducted on Sch C but subject to limitation rule. (U are not treated as having trader status).
 
My annual thread bump of this for folks in need of a tradematching service cheaper than a lot of the standalone software products on the market.

I somehow managed to do the complete opposite of procrastination and downloaded all of my 2010 trades from IB already. Sent them over to www.tradematcher.com (Wayne Durden et al.) and he already sent back my MTM tax forms, trades all matched up ($99.95 for the service and he works through any issues/questions you have).

Only problem now is I need to wait a month before my 1099-B comes out :-). Anyway, hope all had a good 2010 trading year, plenty of volatility to keep us in the batter's box.

Wayne did point out that this year broker's are required to update the 1099's with wash sales and other reporting requirements, so make sure that your brokers are aware that you are Mark-to-Market if you indeed are, this way you won't have wash sale issues and won't have any potential 1099-B mismatch issues with your tax forms.

Take Care!!!
 
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