Stocks and Tax question

[jmcoreymv]

I was told that when tax time comes around, you have to report all your stock transactions. You cant just report your net earnings, is this true? That could be a lot of work since Ive done a lot of trades....

 

[Doggiedog]

Yes.

Sucks but you need to have evidence of your transactions.

That is why I have my accountant do it. I just toss him a huge pile of transactions and let him figure it out.

 

[FeathersMcGraw]

Net earnings is not sufficient since it does not reflect holding time. Tax rates differ depending on whether the sale qualifies as long-term or not.

 

[damiano]

Originally posted by: FeathersMcGraw
Net earnings is not sufficient since it does not reflect holding time. Tax rates differ depending on whether the sale qualifies as long-term or not.

yep this is why you keep a record of your trades and get an accountant to do that for you

 

[kranky]

For each transaction you need the security name, number of shares, purchase date, sale date, and net gain/loss. This goes on Schedule D. You can check out the irs.gov site for Schedule D instructions so you can get prepared.

 

[Banana]

Is this true also for stock transactions within an IRA? All of my equities are in IRAs. Time to call my accountant . . .

 

[FeathersMcGraw]

Originally posted by: 1YellowPeril
Is this true also for stock transactions within an IRA? All of my equities are in IRAs. Time to call my accountant . . .

IRAs are tax-deferred. You don't pay taxes until you withdraw money (or not at all, in the case of the Roth IRA), and distributions are treated as ordinary income.

 

[EagleKeeper]

Originally posted by: 1YellowPeril
Is this true also for stock transactions within an IRA? All of my equities are in IRAs. Time to call my accountant . . .

The IRA custodian will have all the transaction information for you. this shold also be provided to you by law once a year.

The stock transactions are also reported. You can also ask the borker for a year-end summary. As stated above, the problem is that you have to track the initial purchases. Requires a filing system to do this.

An accountant can help you figure out what the numbers are, but you are responsible for providing the input data.

 

[kranky]

Further to FeathersMcGraw's comment, you do NOT need to report on your tax form transactions that occur within your IRA (as long as you aren't withdrawing anything).

 

[Banana]

Thanks.

As to the OP, is this how some people get caught with the AMT, or this that a totally different issue?

 

[Ferocious]

Yeah I used to do all that crap myself. Aint worth it.

Hire a good accountant. A good one will easily pay for himself if you value your time at all and might even same you extra dough.

 

[djNickb]

Depending on the frequency of your trades and types of securities you hold you may want to familiarize yourself with the 'wash sale rule' as it has been known to give some people some quite unpleasant surprises come tax time.