Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: Colin Cody who wrote (997)	4/12/1998 5:59:00 PM
From: Brendan W	Read Replies (1) of 5810

Colin, March was my first month of trading. I did about 200 tickets. Now, I'm contemplating accounting for it. My trading is very messy to account for ... I'm buying and selling the security at the same time ... a bought position can have multiple sells... a sold position can have multiple buys, etc.. The trading is all short-term. I don't want to do what I've done in the past which is to have a spreadsheet where I split up a transaction's purchase amount or sale proceeds to create tax lots. Do I have to buy software that creates the tax lots for me? I was hoping instead on a monthly basis just entering my transactions into a spreadsheet and calculating an aggregate monthly gain by netting the grand total of proceeds against the grand total of cost, while manually isolating and rolling forward any unsold inventory. I would report the monthly amounts as a line item on Schedule D, and provide the detail as an attachment. I know this is not what the Service asks for, but it's so much easier, and the correct tax answer is achieved. What could they do if I pay the correct amount, have good deductions, provide all the information ... just not in the exact format they request?

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