in 2006, I had a lot of stock trades and wash sale transactions so I just..?

Question

listed a few since I had a loss and could only claim up to $3K

My question is if I re-file with a 1040X real soon rectifying the missing stock trades - will I still get in trouble with the IRS?

Answer 1

No, you won't get into any trouble.

But you DO need to get on this quickly to avoid some hassle from the IRS. Sooner or later they will contact you about the missing trades since all that they know about is the selling price. If you don't list them on Schedule D, they will assume a cost of $0 and levy additional tax, penalties, and interest from there. Filing an amended return with the correct information will get them off of your back, but if you file before they contact you first you'll avoid the hassle entirely.

Keep in mind that the $3,000 limitation on capital losses is per year. If you have more than that, you can carry any excess forward to future years until it's used up. So if you have a $9,000 loss for 2006, you'll take $3,000 in 2006 and carry the $6,000 balance forward to 2007. You'll then use that $6,000 first to offset any capital gains you have in 2007 and if any is left, another $3,000 in losses against other income for 2007 and then carry any balance remaining to 2008 and so forth.

Answer 2

No, no trouble, go ahead and file an amended return showing ALL of your trades.

If your net loss is over $3000, you're right you can only take $3000 of it for 2006 against ordinary income, but you can carry any extra over to your 2007 return as a carryover loss.

Answer 3

Boston has a big point.

The IRS computer checks the total field(s) on the schedule D and compares it to the amount of proceeds reported on the 1099-Bs. About 18 months after you file, you will get a mismatch letter. The mismatch letter will assume $0 for basis and that everything was held short term. You may have had losses, but to the IRS, they were all gains.

Get the 1040X done NOW and keep copies of the schedule-D and D-1 that you submit. You will need them when you get the CP2000 letter. (At that point you'll fax them in and say, see, done already.)

Answer 4

You should not get into any trouble if you file an amended return and report all your trades. It is not in your interest to omit any losing trades. Although you can only claim a $3,000 capital loss, and excess loss is carried over to future years to offset future gains.

Your wash sales cannot be claimed but they require adjusting the cost of the replaced stock so that you can calculate the correct gain or loss when they are sold in the future.

Answer 5

each and every sale could be stated on a separate line. If a sale replaced into advertising what you purchased in 5 distinctive purchases, you may checklist it on one line, with "countless" interior the column for date offered, and the completed foundation. the consequence might or will possibly not be distinctive that including each and everything at the same time, with connection with wash sales.