Newbie daytrader tax questions


M

Martini88

I started day trading in 1994. I lost alot of money! Now I
received 1099 forms from Ameritrade, E-trade, and
Cybertrader with thousands of trades listed.

I've never filed taxes before with anything other than
1040EZ. I don't have the money to have someone do my taxes
for me. Is this something I can tackle myself with TurboTax
Premium? Any advice on what to do would be much appreciated.

One more question: Should I make the mark to market election
for 2005? Is this something I can do if I file my taxes with
TurboTax?
 
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P

Paul A Thomas

Martini88 said:
I started day trading in 1994. I lost alot of money! Now I
received 1099 forms from Ameritrade, E-trade, and
Cybertrader with thousands of trades listed.

I've never filed taxes before with anything other than
1040EZ.
"Day trading" since 1994? And you've only been filing
1040EZ's? I hope you meant 2004.
I don't have the money to have someone do my taxes
for me. Is this something I can tackle myself with TurboTax
Premium? Any advice on what to do would be much appreciated.
Yes, Turbo Tax should handle the return you need to file
(which is a 1040 and Schedule D).
 
T

Thomas Healy

Martini88 said:
I started day trading in 1994. I lost alot of money! Now I
received 1099 forms from Ameritrade, E-trade, and
Cybertrader with thousands of trades listed.

I've never filed taxes before with anything other than
1040EZ. I don't have the money to have someone do my taxes
for me. Is this something I can tackle myself with TurboTax
Premium? Any advice on what to do would be much appreciated.

One more question: Should I make the mark to market election
for 2005? Is this something I can do if I file my taxes with
TurboTax?
I suspect you started in 2004, not 1994, or you would have
had this question a decade ago :-(

Each and every sale needs to be reported on Schedule D. I
don't know if TT has a limit on the number of Schedule D
entries it can handle. You also need to check each sale of a
security with purchases of the same security to be sure you
aren't afoul of the wash sale rules.

One possibility is to put all the sales on an Excel
worksheet as an attachment to Schedule D. That also would
let you sort the transactions easily to check on the wash
sale question.
 
D

David Woods, EA, ChFC, CLU

Martini88 said:
I started day trading in 1994. I lost alot of money!
I'm stunned. said:
Now I
received 1099 forms from Ameritrade, E-trade, and
Cybertrader with thousands of trades listed.

I've never filed taxes before with anything other than
1040EZ. I don't have the money to have someone do my taxes
for me. Is this something I can tackle myself with TurboTax
Premium? Any advice on what to do would be much appreciated.
It never occurred to you before you started that there might
be a slight reporting requirement? Either pay someone to do
it or be prepared to spend the time to do it yourself.
One more question: Should I make the mark to market election
for 2005?
Sorry, that's not the type of advice I would even consider
offering without a full client relationship and the
background to support whatever advice was offered.
Is this something I can do if I file my taxes with
TurboTax?
Well I suppose the entries can be done, the election? Heck
if I know. Suggest you ask Intuit and find out if their
program includes it.
 
E

ed

TT premier will do your taxes but you need something
different to justify line 13 of 1040. If you lost at least
$3,000 trading in 2004 after weeding out any wash sales,
complete Schedule D by putting your net total short term
losses on line 2 and long term losses on line 8. Complete
the form and attach a note saying details are available upon
request. Put -$3,000 on 1040 line 13 and complete the
Carryover Worksheet for how much to carryover to 2005.

To determine if you have any wash sales there are some
shortcuts, or you can get a D-1 generater program which
will cost you anything from zero to a bunch, but about $40
ought to do it on the cheap. You might be able to "scope"
it because for any stock you were out of for at least 31
days you can ignore wash sales rules for all previous trades
in that stock. For stocks with actual wash sales, NOW sell
all positions in them and don't reenter that stock for at
least 31 days (this will save you a lot just geting out of
the market). This terminates any 2004 wash sales for 2005
and makes your carryover losses legitimate.

THEN you can run your other income through Turbo Tax.

If you want to actually generate the D-1 and find wash sales on the
cheap do the folowing:

1. Find a D-1 program you can download to your computer
that at least FINDS the wash sales and computes your
porfit/loss on each trade and will print a Schedule D-1 for
both long and short term losses (unless all you have are
short term losses)
2. Get your broker's statement for the year in Excel
format.
3. Either get your broker to match your trades on a FIFO
basis (which he probably can't do), or you do it by
downloading their Excel format of your trades into your own
spreadsheet, add two columns between their purchase date and
amount columns. Title them Sell date and Sales Amount.
Then Cut/Paste the sell date and amount of each sell trade
into the new sell date and amount columns of the appropriate
purchase trade, then delete the remainder of the sell row
you cut.
4. Then, rearrange your spreadsheet into columns
appropriate for your chosen D-1 program and Copy/Paste them
into the programs data entry cells in one fell swoope.
5. The program should find all your wash sales and sort all
the trades into long and short term, arrange them
alphabetically and chronilogically and print them onto D-1
forms with subtotals by page and total. You then feed the
totals into a Schedule D line 2 and 8 (if they are both
losses), print the D-1s and attach them to your Schedul D.

If you follow my advice to temporarily get out of the stocks
that had wash sales you don't have to actually adjust the
wash sales. If you spend enough for a high end D-1 program
it will match the buy/sell trades for you and inport your
broker's statement directly to their program and adjust the
wash sales With my method you don't have to actually
adjust the wash sales if you have more than $3,000 of
legitimate losses.

There may even be a free D-1 and wash sale finder somewhere.

I can't advise about the MtoM accounting for you. Better
you just find a different business your more adept at.

ed
 
P

PeterL

Martini88 said:
I started day trading in 1994. I lost alot of money! Now I
received 1099 forms from Ameritrade, E-trade, and
Cybertrader with thousands of trades listed.
So you've been day trading for 10 years and you are a
newbie? You have never filed a tax return with your loses?
 
A

Andrew

Martini88 said:
I started day trading in 1994. I lost alot of money! Now I
received 1099 forms from Ameritrade, E-trade, and
Cybertrader with thousands of trades listed.

I've never filed taxes before with anything other than
1040EZ. I don't have the money to have someone do my taxes
for me. Is this something I can tackle myself with TurboTax
Premium? Any advice on what to do would be much appreciated.

One more question: Should I make the mark to market election
for 2005? Is this something I can do if I file my taxes with
TurboTax?
Just curious about something - If you started daytrading in
1994, is this the first year you've received 1099 forms with
'thousands' of trades listed? What did you do or get in
years prior to t/y 2004? Something doesn't sound right....
 
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