Reporting stock transactions

[Questionguy101]

I have always thought we have to report the gain/loss of each stock transactions one by one on Schedule D. But this year I have a client who said he has been reporting the gross sales of gross cost basis of all the transactions in one entry and never had problem with it. Is it possible?

[veritas]

My thought

With preparers this is impossible, but with TurboTax all things are possible

[JG EA]

Instructions for Schedule D page 6

Enter all sales and exchanges of capital assets, including stocks, bonds, etc., and real estate (if not reported on Form 4684, 4797, 6252, 6781, or 8824). But do not report the sale or exchange of your main home unless required (see page D-2). Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. You can use stock ticker symbols or abbreviations to describe the property as long as they are based on the descriptions of the property as shown on Form 1099-B or 1099-S (or substitute statement).

You must enter the details of each transaction on a separate line of Schedule D. If you have more than five transactions to report on line 1 or line 8, you can report the additional transactions on Schedule D-1. Instead of reporting your transactions on Schedules D and D-1, you can report them on an attached statement containing all the same information as Schedules D and D-1 and in a similar format. Use as many Schedules D-1 or attached statements as you need. Enter on Schedule D, lines 2 and 9, the combined totals from all your Schedules D-1 or the attached statements. Do not enter “available upon request” and summary totals in lieu of reporting the details of each transaction on Schedules D and D-1 or attached statements.

If you e-file your return but elect not to include your transactions on the electronic short-term capital gain (or loss) or long-term capital gain (or loss) records, you must attach Schedule D-1 (or a statement with the same information) to Form 8453 and mail the forms to the IRS.

There you have it!

[taxdude71]

I've been doing this for years and never had a problem.

[Jiggers]

Luck of the draw

I picked up an elderly client several years ago that prepared his returns from "his" stock records. He never reconciled anything to the 1099B's.

For instance, if he received a refund of principal, he never showed that, even though it was on the 1099B.

He was just lucky, I guess.

Another elderly client figured his capital gains and just sent in a check for that amount times 15%. He said his standard deduction and exemption (MFJ) covered the rest of his income. Never audited, never received a CP2000.

[hjltax]

one guy in my office...

Reports thusly:

Description.....................Acq'd.........Sold ........Proceeds........Cost........G/(L)
Fidelity A/C 456789..........VAR..........VAR.........63,557... ......72,333.....(8,776)

No attachment is provided as a supplement.

[taxcraft]

Schedule D

I have seen posts on other forums to the effect that you can separate long term and short term gains and losses and report totals and send in the brokers statement containing the detail.

[RitaB]

Time to come clean

I have taken short cuts a couple of times (ok, several times) with clients that I know would cry about the fee I would charge to do it correctly. (Well, the bottom line IS correct, you know what I mean.) I figure, if they get a letter, I will throw a fit about the mean old IRS and charge them the appropriate fee to list all the transactions. So far, it hasn't come up.

Yeah, I know, it only takes 2.3 seconds to enter it. Somebody actually told me that once. Yeah, right, they are a better typist than I am, clearly.

So now you know.

Oh, yeah, I ALWAYS show the sale of a principal residence that qualifies for the Section 121 exclusion. I cannot believe they don't require that. Amazes me.

[thomtax]

The wildest one I have run across is the individual that took a net of gains and losses and added the amount to line 7 with wages and had not been challenged by the IRS at the time. Needless to say, I would not go along with this, but it's hard to explain why not when they have been getting away with it. Thanks IRS for helping us to meet your demanding requirements while not backing your own words.

LT

[taxmandan]

I have seen posts on other forums to the effect that you can separate long term and short term gains and losses and report totals and send in the brokers statement containing the detail.

You can net it on the Sch D and send in the brokers statement with the 8453 IF and only IF the information is listed like the Sch D. I had one this year that listed all the Buys on one page, and the Sell information on a separate page, had to list them one by one on Sch D.

"Everybody else does it this way, it's been done before with no problems, someone on a web forum said..." is not going to get you out of preparer penalties assessed if theIRS wants a piece of your hide for doing it wrong.

[ChEAr$]

I have seen posts on other forums to the effect that you can separate long term and short term gains and losses and report totals and send in the brokers statement containing the detail.

Using a broker's statement in lieu of schedule D1 is okay IF it conforms to the columnar
headings on said schedule.

[Lion]

Fat return

If the broker's gain/loss statement contains all the required info, it can have additional info and be in a different order, as long as it's all there. I've attached them to an 8453. But, clients like thinking their return is thick and complex and important, and I like showing how much work I did for them. After all, the brokerage showed all those pages and charged all those commissions or quarterly asset-based fees. I want to justify my prices per pound! I get Excel spreadsheets whenever possible to save me work.

[Burke]

I have seen posts on other forums to the effect that you can separate long term and short term gains and losses and report totals and send in the brokers statement containing the detail.

That is exactly what I do if it is a substantial amount of trades. Never had a question.