Published: Aug 11, 2014
The 2014 tax season is rapidly coming to an end, and many stock and option traders are scrambling to complete an accurate IRS Form 8949 for reporting their capital gains and losses on Schedule D. Misinformation abounds when it comes to trader taxes. What do you need to know?
Published: Jun 30, 2014
One sentence changes everything. You may think completing Form 8949 for Schedule D is pretty straight forward, but the majority of active traders are affected by one instruction which has some massive implications. We'll reveal this instruction and explain three situations in which it affects most traders. And we'll tell you about the implications you need to be aware of.
Published: Jan 17, 2014
2014 is here, which means it is time to start thinking about filing 2013 taxes - not the most exciting task, we know.
The good news is there are no major changes to IRS requirements this year! But there are some updates to IRS forms and instructions as well as other important information you should know. In this post we have put together a collection of information active traders need to know, as well as links to many resources available to help active traders with tax reporting.
Published: Aug 27, 2013
More and more people have been tapping into their IRAs in order to finance trading and investment plans. There are a number of companies now promoting structures such as “Self-Directed IRA-Owned LLC” or “Custodian IRA-Owned Trusts”. While those companies may provide online education to support these structures, leading trader tax CPAs and attorneys do not always agree with their conclusions.
Published: Jul 09, 2013
In a recent webinar with active traders we did a poll and 97% who responded had situations where the 1099-B may not be complete in wash sale reporting. Often this is because the trader has more than one taxable account, or an IRA account, or he trades option contracts. At the root of the problem are differing wash sale rules that the IRS has for 1099-B and for taxpayers. What are the differences and why is the 1099-B often worthless as a result?
Published: Jun 27, 2013
A vital principle in financial accounting is the importance of verifiable and objective reporting. A major problem with the 1099-B is that it fails to provide verifiable reporting. The 1099-B provides subjective information with limited details. For this reason the 1099-B if often useless to active traders and their CPAs. Why do we say the 1099-B is not verifiable?
Published: Jun 11, 2013
Armen Computing, the makers of TradeLog Software, has published a special report entitled The 1099-B Problem: Why IRS Regulations Have Failed to Meet Cost Basis Reporting Needs. The 25-page report is available as a free e-book download. Why did we publish this report? What is the purpose? To appreciate the answers to those questions let me provide some background about cost basis reporting and the 1099-B.
Published: Mar 13, 2013
Many TradeLog users would like to file their taxes with popular programs like TaxACT® or TurboTax®. Of course you likely know that those programs, on their own, often cannot handle Form 8949 reporting for active traders. That is why you use TradeLog! But how do you e-file with TaxACT® or TurboTax® and use your TradeLog generated Form 8949?
Published: Feb 13, 2013
Some major brokers have taken a troubling position in the way they report wash sales on the 1099-B for short sales. This caused big problems when taxpayers tried to reconcile and understand their 2011 1099-B reports. But it appears some brokers continue to use this baffling and incorrect method, which will cause more tax reporting problems for 2012 tax year.
Published: Feb 06, 2013
Exchange traded funds (ETFs) are becoming more and more popular. Did you know that ETF options can have special tax handling? Some of these options qualify as section 1256 contracts. Under Section 1256 the gains and losses are treated as 60% long-term and 40% short-term capital gains/losses, regardless of the holding period. What qualifies an ETF option as Section 1256 depends on it's structure and whether the option is listed or over-the-counter.