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Day trading and Schedule D

So far this year I've done a lot of stock day trading. At this rate, by the end of the year I will probably have over 1500 day trades. That will be a lot of Schedule Ds to fill out. And does the IRS really want to get 50 or more pages of Schedule Ds? I'm thinking of somehow consolidating my trades into some sort of summarized form. Like instead of putting one trade onto one line of the Schedule D, I might put a total of all day trades for one particular stock. So if I day traded a stock 300 times this year, I might put the following onto one line of the Schedule D:

Description of property: 300 day trades of FNM (300,000 shares total) Date acquired: here I will put the date of the first day trade Date sold: here I will put the date of the last day trade Sales price: the sum of the sales of all the FNM day trades Cost: the sum of the costs of all the FNM day trades Gain: the total profit (or loss) of my FNM day trades

By doing this, I could probably fit everything onto one Schedule D-1.

What do you think of this idea? Would this method of documenting my trades increase the chances of being audited? Not that being audited would be such a horrible thing, I have all my trade confirmations and broker statements in a massive binder, so if someone wants to come over and go thru hundreds of pages of documentation, they are free to do so. But it would take up some of my time.

Oh, and I do know about the wash sale rule, but I will stop trading for the entire month of December to avoid that.

Reply to
void.no.spam.com
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I recommend my clients use Gainskeeper. It keeps track of ALL your transacctions, even sorting out Wash Sales. It does all of the work for you in preparation of Schedule D.

Reply to
John H. Fisher

snipped-for-privacy@gmail.com posted:

Last thing first: That won't solve the wash sale problem -- which is related to individual trades in individual stocks, all through the year.

If you have the right software, you can summarize and refer to an attached e-file, with details of all trades when you file. If you're filing on paper, you can also summarize, but I think they'll still want to have the detailed accounting which backs up your summary.

Given the volume of trades you're citing, it might be worth checking with your local IRS office to see if they'll accept "details on file and available upon request."

AFAIK, current IRS regs still require details, although they may be submitted electronically ... but the times they are a-changing, and day

- trading is a reality, so they may be bending.

Bill

Reply to
Bill

If all your trades in a stock were during the calendar year (thus all short-term) AND you have no position in the stock as of December 31 AND you stay out of the stock for 30 days after your last sale the Schedule D bottom line is the same as if you properly accounted for each sale. I've never heard of IRS objecting to this approach. The number one thing they're looking for is that the total sales receipts on the Schedule D matches the total sales receipts reported on the 1099-B's.

Reply to
Phil Marti

I elected to be marked to market by notifying the IRS so on lat year's taxes. That elimenates the paperwork and the $3,000 loss limit. I pay whatever tax is due as of 12/31. Just for ease of filing, I am flat in my trading accounts on 12/31.

Reply to
ed.ryan638

One issue is that the Form 2210 Schedule AI will not be correct, expecially if most of the loss is later in the year.

Reply to
Arthur Kamlet

I am a client of TDAmeritrade, who offers Gainskeeper for free. I have looked at it before, and noticed several errors where it said I had wash sales when I did not.

Reply to
void.no.spam.com

Reference:

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There is a the gray area of establishing you are "professional trader" also covered a bit there.

Reply to
rick++

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