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You're probably here for one reason ... you
need help with your Schedule D-1. Well, you have come to the right
place! I have over forty Kim Snider alumni as clients now. If
you are one of them please provide feedback for others on Kim's website by
clicking
here. Feel free to read the information below regarding the popular
reporting downloads and why I developed my own.
If you're just ready to get your Schedule
D-1 done, then click
here.
Tax Reporting
You're familiar with gains and losses but
are you familiar with the term "wash sale"? If not, then you
need to be if you trade covered calls on a monthly basis. You need
to capture all this information for two basic reasons: (1) to
determine your investment performance, and (2) to report it to the IRS on
your tax return. If you only have a few trades you can probably
determine both with a self-developed spreadsheet. But if there are
many trades, with wash sales, stock splits, reverse splits and spin-offs
... well, it can get pretty difficult, even for a CPA.
There is software that can be purchased
online to help you. However, a few questions will obviously arise:
- Do I know how to get the correct
information into the software?
- What do I do with the output? How
do I put it on my tax return?
- Is it correct? What do I tie the
amounts to?
- When do I report December option sales?
- What about the closing of positions in
January?
- If I 'bundle' are those shares really
sold?
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I think the two most popular downloadable
products are TradeLogÒ
and GainsKeeperÒ.
I have evaluated both with the following comments:
GainsKeeper
- Free at some broker's websites
(optionsXpress) and at a minimum stock trading level
- Produces a Schedule D-1 that can be
filed with your tax return
- No ability to format output, i.e.,
reporting in whole dollars only
- I used it for my data once to see how it performed ... it was off over $48,000
- The majority of my clients who have
used GainsKeeper also question its accuracy
TradeLog
- Technically accurate and fast if input
correctly
- Multiple input formats for multiple
brokerages
- Technical support available online or
via telephone
- TradeLog cannot handle spin-offs
automatically (I haven't found a package that can)
- You need to be good at downloading
data from you broker, capturing it in a particular file format and
transferring it into TradeLog
- The output is a report that is
attached to the tax return. Although technically correct, are
you sure you completely understand it and if not, as a
do-it-yourselfer, would you attach
something to your tax return you don't completely understand?
- Here are some samples of TradeLog
output including my comments
(Note:
These examples were run with a version of TradeLog purchased in 2006
so the errors and reporting may have been corrected and/or changed)
- Costs $69 to $297 for a one-year
subscription; Annual updates/renewals are $55 to $238
► You know by now what
I'm leading up to ... let us do it for you!
I was not satisfied with the input,
output or accuracy of the aforementioned downloadable software ... so I wrote my own.
As you see in my resume, I began my career as a programmer with Arthur
Andersen and continued to expand my programming skills with Microsoft
products. I use a combination of Access and Excel to produce the
tax reporting forms. Samples are available here.
The process is simple for us to prepare your Schedule D-1:
- Download the
updated
instructions for getting your optionsXpress information to us.
- Download your information from
optionsXpress (included in instructions)
- E-mail information to us
- Original transaction activity from
broker in Excel format
- Form 1099-B (fax or scan & email)
- We will return to you via email
- Transmittal letter explaining how to
incorporate forms into your tax return
- Schedule D-1
- Addendum to Jurat - We sign as "Paid
Preparer" for the Schedule D-1 and the Jurat is attached to your
return so that the IRS knows who prepared it. In other words,
we take responsibility ... you don't get that with downloadable
software
- Report of 'Open Shares' with the
carryover cost basis to the subsequent year
- Invoice for services - our billing
rates are $120 per hour billed in 15 minute increments - most taking less than three
hours for about a five page Schedule D-1. We will be happy to
provide an estimate once we examine your information. See
samples of what you
get.
Please feel free to contact us with any
questions via email or
telephone.
I hope to hear from you soon!
