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Tax filing with IB
- Thread starter caret311
- Start date
This site has some inexpensive excel macros that do the job. You have to handle wash sales manually.
http://www.investotek.com/
http://www.investotek.com/
Quote from Bob111:
10 times every year..same question...here is how i report my stocks trades-
assuming we are talking about short term gains-take your proceeds,subtract your PnL-you got the basis cost. put those 3 numbers in your tax report-done
Bob, Well I sure wish we could do it that way. IF you had trader status and the MTM election with the IRS it USED to be you could do that but now you have to list the details of every trade and it has to be on Schedule D or a matching extension. You can't attach your brokers statement or say "details upon request." The law changed. If you don't believe me look at the IRS instructions. So now our returns run hundreds of pages -- insane but that's the way it is. If you got away with it so far watch out because they can send your return back and demand taxes based on your proceeds number with a cost basis of zero!
Thank you for info BrianH! no, i do not have trader status,just file as a average joe the plumber.but i'm thinking about elect M2M either for myself or company. not sure how they can demand taxes on proceeds with zero basis(i understand that they can do pretty much whatever they want) but..i do have my Sch D and i can present it in the court, if necessary.Quote from BrianH:
Bob, Well I sure wish we could do it that way. IF you had trader status and the MTM election with the IRS it USED to be you could do that but now you have to list the details of every trade and it has to be on Schedule D or a matching extension. You can't attach your brokers statement or say "details upon request." The law changed. If you don't believe me look at the IRS instructions. So now our returns run hundreds of pages -- insane but that's the way it is. If you got away with it so far watch out because they can send your return back and demand taxes based on your proceeds number with a cost basis of zero!
the more i trade,the more i pay, and then i have to deal with all my taxes and numerous costly conversations with my CPA and all those complex tax rules..all this make me sick..if some conflict between me and irs will ever arise-that would be the first and last one for me. i will leave this messed up country and they never going to receive a dime from me. i'm not a us citizen,i can go anywhere i want. no world wide bs taxes for me.i'm getting very close to this boiling point,while observing all this tax nonsense in US.
Quote from Bob111:
Thank you for info BrianH! no, i do not have trader status,just file as a average joe the plumber.but i'm thinking about elect M2M either for myself or company. not sure how they can demand taxes on proceeds with zero basis(i understand that they can do pretty much whatever they want) but..i do have my Sch D and i can present it in the court, if necessary.
the more i trade,the more i pay, and then i have to deal with all my taxes and numerous costly conversations with my CPA and all those complex tax rules..all this make me sick..if some conflict between me and irs will ever arise-that would be the first and last one for me. i will leave this messed up country and they never going to receive a dime from me. i'm not a us citizen,i can go anywhere i want. no world wide bs taxes for me.i'm getting very close to this boiling point,while observing all this tax nonsense in US.
I hear your frustration. The IRS does seem determined to make being in the business of trading harder than most others. Not sure if you can elect MTM if you don't have trader status first. If you trade short term and full time there are many advantages to having trader tax status including no limitation on losses or deductions. See tradertax.com for a lot of info -- he's the main man in the field. I'm debating working with them but am leaning towards just getting their version of TradeLog software and working with my local guy. I think the zero cost basis thing is one of the IRS's "weapons of terror" just to put the fear of God into you for not filling out all their forms. As long as you could submit the proper backup I expect they would back down but who wants to go through that with attendant risk of backup witholding etc.
Quote from BrianH:
I hear your frustration. The IRS does seem determined to make being in the business of trading harder than most others. Not sure if you can elect MTM if you don't have trader status first. If you trade short term and full time there are many advantages to having trader tax status including no limitation on losses or deductions. See tradertax.com for a lot of info -- he's the main man in the field. I'm debating working with them but am leaning towards just getting their version of TradeLog software and working with my local guy. I think the zero cost basis thing is one of the IRS's "weapons of terror" just to put the fear of God into you for not filling out all their forms. As long as you could submit the proper backup I expect they would back down but who wants to go through that with attendant risk of backup witholding etc.
re: listing each trade -- ran across this elsewhere on the forum:
http://www.nysscpa.org/trustedprof/206/tp4.htm
article dated 2006. if they(irs) are looking to kill that golden goose(me) then they will be all over me in past 3 years,when i report my trading profits the old fashion way.
as for trader status-
irs is pretty clear who is qualify:
Special Rules for Traders in Securities
Special rules apply if you are a trader in securities in the business of buying and selling securities for your own account. To be engaged in business as a trader in securities, you must meet all the following conditions.
*
You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation.
*
Your activity must be substantial.
*
You must carry on the activity with continuity and regularity.
The following facts and circumstances should be considered in determining if your activity is a securities trading business.
*
Typical holding periods for securities bought and sold.
*
The frequency and dollar amount of your trades during the year.
*
The extent to which you pursue the activity to produce income for a livelihood.
*
The amount of time you devote to the activity.
If your trading activities do not meet the above definition of a business, you are considered an investor, and not a trader. It does not matter whether you call yourself a trader or a âday trader.â
http://www.irs.gov/publications/p550/ch04.html#en_US_publink100010601
one thing is not clear to me-once you elect m2m-how to give up this status,when you done with trading? in case of LLC-you can dissolve it, but what about individual?
Thank you!
as for trader status-
irs is pretty clear who is qualify:
Special Rules for Traders in Securities
Special rules apply if you are a trader in securities in the business of buying and selling securities for your own account. To be engaged in business as a trader in securities, you must meet all the following conditions.
*
You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation.
*
Your activity must be substantial.
*
You must carry on the activity with continuity and regularity.
The following facts and circumstances should be considered in determining if your activity is a securities trading business.
*
Typical holding periods for securities bought and sold.
*
The frequency and dollar amount of your trades during the year.
*
The extent to which you pursue the activity to produce income for a livelihood.
*
The amount of time you devote to the activity.
If your trading activities do not meet the above definition of a business, you are considered an investor, and not a trader. It does not matter whether you call yourself a trader or a âday trader.â
http://www.irs.gov/publications/p550/ch04.html#en_US_publink100010601
one thing is not clear to me-once you elect m2m-how to give up this status,when you done with trading? in case of LLC-you can dissolve it, but what about individual?
Thank you!
Quote from Bob111:
article dated 2006.......
I file with trader status as an individual with MTM. The accompaning changes in filing methods only apply to my trading account. Other accounts with longer term positions (theoretically! I still trade them too much) are treated as normal "investment" accounts and reported on Sched D. If I stopped trading I think I would just start treating all the accounts as investment accounts and attach a note to the IRS like "taxpayer is no longer a trader in securites with the MTM election" or some such but best to speak to your CPA.
Or you could do it yourself with this handy software:
http://download.cnet.com/TradeKeeper/3000-2047_4-10078926.html
http://download.cnet.com/TradeKeeper/3000-2047_4-10078926.html