Income from securities Please help

[jonnycashusa]

Hi All,

I received a letter from IRS telling me that I owe them $1500.00 from the securities that I own in the stock market. I hope I can explain this. I opened an account 2 years ago and invest $2000 in the stock market. I was buying and selling stocks online but I never earned any money and I lost most of it. The letter I received shows that I have $10.000 worth of stocks and they want me pay the tax out of it with the interests. This $10.000 is not the money that I earned over two years. It is the sales activity and if you add them up it comes to $10.000 and some change. I never earned money from the stocks why should I pay tax from something that I never earned. How can I fix this mistake. Please guide me on this matter I appreciate any help. Thanks.

PS. I never filed anything on my tax return as I lost money.

Jonny

[Gretel]

Jonny,

The IRS doesn't know that you did not make any money on your stocks. You will need to file tax returns or amended tax returns with schedule D attached, which will show your profit or loss on your stock sales.

If you can not do this yourself find a tax preparer at your place. Good luck.

[jonnycashusa]

Thanks a lot for your promt reply. I appreciated so much

[DaveO]

I would add

You will need the buy and sell prices for all the trades. Take that with you when you make your appointment. Also take the notice from the IRS.

[OldJack]

>>PS. I never filed anything on my tax return as I lost money.<<

That was not very smart! What were you thinking?

[JoshinNC]

Many clients don't understand that you must report a loss

>>PS. I never filed anything on my tax return as I lost money.<<

That was not very smart! What were you thinking?

They also don't understand that the IRS only recieves info related to the sale and not the purchase. Ignorance is no excuse, but I do see where the poster is coming from.

I do believe that this one should be handled by a qualified tax pro, so be prepared to pay for his/her expertise in these matters.

Good luck!

[jonnycashusa]

Can someone help me!

Hi All,

I received a letter from IRS telling me that I owe them $1500.00 from the securities that I own in the stock market. I hope I can explain this. I opened an account 2 years ago and invest $2000 in the stock market. I was buying and selling stocks online but I never earned any money and I lost most of it. The letter I received shows that I have $10.000 worth of stocks and they want me pay the tax out of it with the interests. This $10.000 is not the money that I earned over two years. It is the sales activity and if you add them up it comes to $10.000 and some change. I never earned money from the stocks why should I pay tax from something that I never earned. How can I fix this mistake. Please guide me on this matter I appreciate any help. Thanks.

PS. I never filed anything on my tax return as I lost money.

Jonny

How should I write a response? Can someone tell me what the letter of my response shold include?

[Acownt4it]

Your response should

be to HIRE a tax professional to help you with this.

Most, if not all of us on this board are PAID tax preparers. While we don't mind helping someone out with a basic questions; I think giving you advise on a tax matter such as yours on a message board is not in your or our best interest.

I suggest you find a professional tax preparer in your town to assist you with this tax matter.

[ChEAr$]

reporting of capital gains/losses

How should I write a response? Can someone tell me what the letter of my response shold include?

The first thing you do is prepare a schedule d showing the gross proceeds and the cost
of those stocks you sold while you had the account. Somewhere you have those
records; I hope.

You might want to consider using a local tax pro, either an Enrolled Agent (EA) or
a Certified Public Accountant (CPA) in your area.

You're right, you don't owe, but you have to prove it.

[Bird Legs]

Bogus? Johnycashusa

Could this be a bogus message since the same question was posted a second time after the first time was answered.

[dsi]

Quite simply, hire a tax pro before you get yourself deeper in the whole.