Replies to post #17989 on Ariel Way, Inc. (fka AWYI)

[lc45]

vin660, First, it isn't as life threatening as its reputed to be. Basic process steps are repeated for each SALE of stock. That will be provided by your broker on a 1099 form. YOU will need to furnish the matching dates, shares, and $$ for the purchases. Lots of nitty/gritty work involved dividing amounts so they match. Just print out your monthly, or end of year acct detail buys & sales. Ira accts don't need anything done on them. No IRA capital gains tax on gains, but no credit on losses either. On margin accts you will pay taxes on your profits, but will subtract your losses first. If it ends up you lost for the year, it subtracts from your overall income. There is a yearly limit, but a carry over process for the excess, so you don't loose it completely, (see the bottom of the sched d). Two types of gains. Long term capital gain is 365 +1 day ownership. Short term is 365 and less. Different tax rates. They go on different areas of the schedule d & d-1 (d-1 is just more entry spaces that are then totalled and entered on one line of the d form). If you are near an IRS office, they have the instruction books, sched d, d-1 and 1040 form, or you can go online, print the form, and read & print the instruction pages you need. Its a somewhat time consumming task, so if you make a lot of trades, allow time for individually addressing each of your accts and their trades with extra learning and organizing time. But you can do it. Good luck. Oh, one thing; I copy the 1099s and my acct statements that I am going to use, and do the matchup writings on those copies. You then always have the originals for addl copies if you screw up, or just need a neater version. LC

[lc45]

Vin660, If you decide to use a tax preparer, make his life A LOT easier, and save yourself some money, by splitting out the buy & sale matches before you give him the package. One sale can be made up of shares from multiple buys, and possible different prices. Or one buy group could be sold for multiple prices in smaller lots. That is the match up I referred to. That is what takes the time. LC

[mysterymeat]

You can deduct $3000.00 in losses per year. On the Schedule D you'll list all the the securities sold during the tax year. From that list you'll add up all of the gains and then subtract all of the losses. If you end up with a loss of $4500.00 you would take the $3000.00 write off and the remaining $1500.00 loss will carryover to next year.