When doing your taxes, is there a legal way to avoid listing out each stock buy/sell you had that year?

Question

I have made a few hundred trades a year, on average, for the last 8 years. I am terribly disorganized, and already dreading tax time and its not for another three months. I would love a way to not have to list out every trade, the value, the number of shares, the gain/loss, trade date, etc in my tax forms. Talk about a pain in the a$$.

In my perfect scenario, I'd list the entire profit/loss numbers on a single line somewhere, which I'd have computed on my own using numbers I *know* to be accurate, but computed via a system I created for tracking them in MS Excel....

Answer 1

Do not antagonize the IRS by trying to take a short cut in your tax return. You must list all your trades.
There are two possible solutions to your problem.

1.) Use gains keeper. They will record your trades and keep the required records. Scot trade gives all account holders free access to the service, but you can subscribe to it.
http://www.gainskeeper.com/

2.) qualify as a professional trader, and use mark-to-market accounting to figure your annual profit or loss. This is the 'one line' solution you are looking for, but it takes planning .
http://www.irs.gov/taxtopics/tc429.html

Answer 2

Well, when I do my taxes, my accountant only wants to see the the forms from my broker (consolidated 1099 and Year end statement) and then I pull a cost basis report on my closed trades, and total up just the "costs" of my closed trades(and if you do options, it may have closed just because of a symbol change-which has hung me up for hours scratching my head;-). He then just uses that figure to offset the "reportable income", or sell price of my shares that shows on the consolidated 1099. I hope that made sense, but it is much easier than doing the cost/sell trade by trade. I know how you feel, as I too tend to make a lot of trades. You also have to know if they are short term or long term. I still don't understand why brokers reports don't do this, as you would think in this day and age it would be so easy for a computer to keep track.....anyway, hope this helps.

Answer 3

Is there a legal way to avoid listing each stock buy/sell you had for the tax year?...YES!....Its called an retirement account. Set up the account and trade to your hearts content, because its in an IRA or something similar you don't have to worry about gains and losses untill you start pulling money out. (Side note...if your making that many trades your most likely not making much money if any esp. if your counting the cost of each buy/sell order. You might want to start thinking long term investments unless your Warren Buffet or something and have that kind of money to waste because what won't be eaten up by the buy/sell order prices will be taken by the poor tax preparer who has to enter all that data.)

Answer 4

You do a few hundred trades a year? That is a crazy amount of trades. You should consider a asset management service to not only conduct these trades but keep it organized for you. This service is something all brokerage houses offer. They will manage your assets in a way that makes it very easy to report. They may even do your taxes for you. This isn't real cheap by any means youa re talking about 1% of your average balance a year plus brokerage commissions.

Its well worth it if you have a ton of money. You shoud have at least 250K to get a service like this, and if you don't and you are doing "hundreds of trades" than you will have to deal with the taxes.

You should think about not doing so many trades , I bet your brokerage commissions outbalance the benefits of this. Good Luck!