reporting to the IRS

[grassferret]

My investment portfolio has a value of roughly 11k. I bought a lot of stocks throughout 2006 and sold many almost as quickly as I would buy them. It took me a while to learn how I like to trade, and as a result I lost some money. Since I was trading so much, my mothers CPA (as I use hers) said that it is going to cost me A LOT of money to go through all my trades to report it to the IRS. Would trading even be worth my time then? Should this be the case? Any help would be much appreciated.

Thanks for the help,

G Ferrets

[John Law]

I am not knowledgeable like many on this board, having only been a small-time trader for a few years, but after paying a guy way too much to file my trades, etc. I finally realized that I can do my own schedule D and save a little $$$. A lot of the tax software, like HR Block just has you fill in all the trades yourself. It takes some time if you have been doing a lot of trading, but it sure beats paying a CPA. I have no idea what your tax situation is like; mine is very simple at this point in my life, but I would look into filing yourself online. If you make under a certain amount ($40K?) per year, you can even use the software for free. Check out IRS.gov

Good Luck

[JVanDermark]

I know with TurboTax, the program can import your stock sales from a lot of different brokers.

[zyzzyva57]

http://www.cramersmadmoney.com/showthread.php?t=9091

[Luc1Grunt]

My investment portfolio has a value of roughly 11k. I bought a lot of stocks throughout 2006 and sold many almost as quickly as I would buy them. It took me a while to learn how I like to trade, and as a result I lost some money. Since I was trading so much, my mothers CPA (as I use hers) said that it is going to cost me A LOT of money to go through all my trades to report it to the IRS. Would trading even be worth my time then? Should this be the case? Any help would be much appreciated.

Thanks for the help,

G Ferrets

Hmmm.....I would like to question the CPA. You are not likely going to file "trader status"....therefore you will have less paperwork. Your trading is going to be reported on "D" and the IRS requires detailed lists of each trade, however; most do not list each one and the IRS does not seem to pursue. You'll have the info if needed for an audit anyway. Don't get me wrong.....I traded over 1.5 million in turns last year a little less in the years preceeding. I attach copies of Gainskeeper printouts (30 pages) to the tax return as recommended by my CPA and have never had a problem. Gainskeeper is free with Scottrade, but you can buy retail if needed. There are other good programs out there as well. Can you imagine the size of the returns on traders turning over 65 million $$ in shares a year? It only takes around 200k base capital at 2:1 margin to do that.

Go to elitetrader.com and search taxes. Very good info there and I have borrowed much info from the posters.

My comments are just that....my comments. Use your own judgement and get professional advice. A good CPA who is versed in "trading" would be the place to start. It IS worth the money.

[zyzzyva57]

Get this addendum to my evaluation of Tax Programs: OK, I get Money Deluxe for $10 (if I send in my rebates), plus a free year to such services as GainesKeeper (the full version and not Scottrade Lite version of the service) by buying TaxCut from Staples

If I could pull this same stunt yearly with Money included, then I keep having an updated version of Money plus GainesKeeper regular for $10

[optimus25]

I created a spreadsheet to input all my buys and sells and dates. This helped me when I did my taxes on Turbo Tax. A CPA will charge you a great deal to input this info on your schedule d.