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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: manalagi who wrote (62027)	3/24/2006 4:12:38 PM
From: katytrader	Read Replies (1) \| Respond to of 206098

I believe that the brokerage house only reports gross proceeds. This allows you to adjust your cost basis without running afoul of anyone's computers. So, for example, if you are short and have to cough up a dividend, you can add that amount to the cost of the stock. Also, if you inherited stock...or simply deposited stock into a brokerage account...the brokerage house would have no way of assigning a cost to the shares. You can see if the brokerage house had to report cost basis there would be millions of discrepancies beyond the usual confusion. katytrader

To: manalagi who wrote (62027)	3/24/2006 5:46:07 PM
From: Paul Senior	Read Replies (1) \| Respond to of 206098

I don't like how this tax issues is handled in some posts here. I have a different way. But I'm no tax expert. (And nobody should assume I even exist as a real tax-paying person, this being the internet.) Why would anybody worry about getting a letter from the IRS with the conclusion if they did, they could explain it to the auditors. No! You explain it BEFORE you get the letter, so you don't worry about and don't get, that darn letter. Put the explanation on a piece of paper attached to Sch. D. I use Sch. D to report all sales where there were associated purchases. Just like the instructions say. I do not jury-rig anything. The reconciliation letter resolves any issues. That written explanation goes roughly like this: (title:) Reconciliation: "Summary of 2005 Stock Transactions Gross Proceeds" 1099-B "Proceeds from Broker Transactions" as reported to IRS by XYZ Brokerage: $134,250. Sales amounts as reported by taxpayer Short term gains and losses-- sales (Sch D): $35,000 Long term gains and losses-- sales (Sch D): $94,000 Short positions still open: 100 sh. Frankco sold 1/5/05 $2,125 50 sh. Bigbear Co sold 6/15/05 $3,125 Total Sales: $134,250. Repeat for 2nd, 3rd brokers (if any) This way, the auditor can see exactly what's going on - what you did. There's no head scratching. (Whether or not the auditor believes you though, that's another story.) ---- I find it irritating to read posts by people who do not know or have not planned their tax consequences, such as reporting. It speaks to me that the person should not be shorting stocks and maybe shouldn't be trading either, because the person does not know what he/she is doing. It's like, "Oh here's a tool, it's shorting, I can do that". Not quite! lol.