Day trading and Schedule D

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.

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

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.

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.

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

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.

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