Day Trading

[Jesse]

I don't mean to be so stupid but I have never come accross such a large amount of stock trades/sales.

Had someone drop off thier info and said "had a lot of stock trades, call me if you have questions".

In reviewing the info he had in excess of $50million in 1099-B exchanges from the period of May thru September. Short sales - which is new to me. He has just under $50,000 in losses.

It is my understanding that I need to report this on the schedule D with $3,000 per year loss carryforward.

With wages and dependents this return will potentially receive a sizeable amount of EIC and additional child tax credit. The huge amount of loss should not disallow the EIC as it is not a schedule C loss, correct.

I want to make sure I am not missing something?

[jainen]

does not affect earned income

>>amount of loss should not disallow the EIC as it is not a schedule C loss<<

It does not affect earned income, but does reduce AGI which is also an index for EIC.

>>I want to make sure I am not missing something<<
Watch for wash sales. I forget how exactly that works with short sales. It doesn't much matter if he sold everything by September, but you are still supposed to list every single transaction separately.

[solomon]

Tell him

to get Tradelog - it will even handle the wash sales.

[Chief]

Day trader

I am interested in knowing what you are going to charge this guy and how much you feel that you will get up front.

[Jesse]

I am interested in knowing what you are going to charge this guy and how much you feel that you will get up front.

I don't know yet, but according to him it's easy, just send the IRS the paper work he gave me(all 50 pages), it has the same info! I have not done anything as of yet.

[Jesse]

to get Tradelog - it will even handle the wash sales.

Is this a program for day traders? It doesn't sound like he'll be doing this any longer, he lost too much money - really didn't know what the heck he was doing!

Forgive my ignorance in this financial market, but if 100% of the stock was sold by the end of September wouldn't the entire loss be deductible (at $3000 per yer) as even the loss from the wash sales would be added to the basis of the stock that was sold in that last month, if nothing more was purchased in the 30 days to follow?