TD Ameritrade

[erchess]

delivered to my Father a corrected end of 2006 Statement at 11:14 pm on 4/17. I have not taken the time to look at the stock sales but there are enough changes in the other numbers that I know I am going to have to amend the return. Dad was a client of TD Waterhouse before it linked up with Ameritrade and he always got two or three corrected statements but the last one always seemed to arrive the first week in April. Can anyone recommend a discount broker who will deliver accurate year end information by the first week of April and has good customer service?

The numbers won't change enough to cause Dad much pain, and it won't take me more than an hour to do the first amended return I have done on a computer since going to the software I now use, but still I feel that this broker has delivered unacceptable customer service for too long even though I like the ads with the guy who used to be a Prosecutor on Law & Order.

[Snaggletooth]

Almost Anyone

...will give you more timely information if this gushing forth in April is an annual event.

Another alternative is to calculate your father's sales (and redemptions) independently from his own records, if he keeps them. If he is a serious investor, he will keep up with his stocks religiously.

The one thing that may prevent him from reconciling to 1099-Bs are redemptions. Economically, they are ignored because their effect is minimal. For example, if a municipal bond for $15,000 is redeemed at $14,975.25, the IRS will still expect a schedule D entry for $15,000 in gross sales. If this item is left off, they will bill you as if the $15,000 is sold with zero basis.

[erchess]

Dear old Dad

keeps records of the stocks he follows, even drawing charts on paper. I have explained that for minimal cost I could set him up in software that would keep his records. He is unmoved. In fact, if he could he would rather use a slide rule than a computer to follow his stocks. There are essentially two problems with his paper records. The first is that he does not record his buys and sells and the second is that he loses about half of what he writes before the year is over. So all in all we are dependent on the broker. Besides that, what ordinarily changes at Ameritrade is such things as the amount of qualified dividends, capital gain distributions, distributions in lieu of dividends, and so on.

Now let's suppose that I persuaded him to take his account elsewhere. Could he transfer stocks or would he have to sell the stocks he owns and cover all his shorts?

[S T]

Ameritrade not the only one

Ameritrade is not the only one, try Citgroup (Smith Barney), Merrill Lynch, Morgan Stanley, Schwab, UBS, etc.

I have seen corrected statements from all, sometimes as many as 3 or 4 and arriving as late as April 10th.

It isn't necessarily the broker, but the brokerage house! The 2005 tax reporting year seemed to have a lot of corrected reports.

If the new brokerage house can handle the portfolio, I think you can transfer from one brokerage to another without a sales transaction, but check first. Also make sure you know basis and acqusition date, as that will need to be provided to the new brokerage house if they are to track the gains/losses.

Most of my clients reports do show redemptions and I do report them on the Schedule D. Also the return of principle entries. Seems like both of those figures are included in the gross proceeds amount on the 1099B.

Sandy

[Dervis]

Transferring accounts

Now let's suppose that I persuaded him to take his account elsewhere. Could he transfer stocks or would he have to sell the stocks he owns and cover all his shorts?

He can transfer the stocks without selling them, no problem. What won't transfer is the record of the basis. He will have to figure that out himself or get Ameritrade to send him a printout before the account is transferred.

[solomon]

Try using

Gainskeeper or Tradlog.

[George Boutwell]

I know the type

1) Your father doesn't make any money with all this trading, but he has fun. If he doesn't do it as an alternative to playing the horses, maybe you could get him a subscription to the Racing Form instead of the Wall Street Journal.

2) The more exotic the investment, the better. He probably has moved well beyond the REIT that owns shopping centers and apartments in 42 states, and now is buying that Norwegian oil tanker company, which spins off leasing subsidiaries as dividends. Don't forget the pipeline PTP's. Why should he worry about the complexity of tax reporting for these "investments" ? He always has you to sort it out.

3) He will gladly give serious consideration to the suggestions and recommendations of the geezer he met while they were both refilling their coffee at McDonalds, but your opinion is worthless because after all, you are only a kid. So why do you even try?

Am I right?

----------------

You get what you pay for. The full-price brokers will include with their 1099s, a breakdown of capital gains and losses, showing basis for every transaction and whether it was short-term or long-term. I try to steer my clients who don't want to pay high commissions (but aren't as cheap as your Dad) to Fidelity Investments, where most if not all accounts now provide the same information. (I was doing this long before Fidelity hired my nephew, a bright kid with an MBA, away from the Wall Street firm where he worked as an analyst.) Schwab is a good second choice, although somewhat more expensive. They have more offices, for those who don't want to deal by phone and website.

[bigdadder]

Discount Brokers

I've dealt(with personal accounts) with Schwab, TD Waterhouse--TD Ameritrade, E-trade, and Scottrade. Scottrade is head and shoulders above the others in all aspects. Their records and reports are very very good and when I see a client come in with a Scottrade account I feel that I can easily get a handle on what he has done.

[erchess]

George doesn't quite have my Dad figured out

Dad doesn't like either coffee or McDonald's and he is a hugely successful investor. He entered the market with $10K in the 1960s and has built the account up to over 150K today despite removing at least 10K each year since about 1977. He had over 30k of investment income in 06. He does currently have a bunch of mostly foreign oil, uranium, and precious metal stocks in his portfolio because he is bullish on those sectors. He does not like REITs, mutual funds or bonds in any environment. He does make extensive use of shorts and a combination of sector, fundamental, and technical analysis but I can't get him to use options despite dragging me with him to a three day course where all we learned about was technical analysis and options. He has worked with full service brokers but he's never made money with one and here is why. The broker typically calls with two or three plays. Almost invariably equal investments across the suggestion would have made money but absolutely invariably Dad chooses to put all his eggs in one basket and he picks the worst of the two or three. So after a while he fires the broker or in one case the broker fired him.

My opinions about brokerage houses go in one ear and out the other because he sees me as a spendthrift. He also likes everything about Ameritrade except the year end statements and the problems he has using their website. Both he and I think that the website problems are due to our having no dsl or cable internet available and to his not being comfortable with Windows. If we're right, those problems would transfer to a new brokerage house.

He does by the way have great faith in my ability to do his taxes and he is grateful beyond words that I keep him out of trouble. I "even" got him out of the penalty when he failed to take the IRA RMD the first year he needed to. The problem was that his account with VALIC got lost in the shuffle when the rep he had used for years was fired and the next rep left the company voluntarily. I was asleep at the switch because I was not paying attention to his age. I counted on the company to tell him when and how much to take. Dad is the guy who was used to dealing with responses to his notes but he felt absolutely helpless in this instance when anyone with TTB or QF could have looked up what to tell the IRS.

[George Boutwell]

He does currently have a bunch of mostly foreign oil, uranium, and precious metal stocks in his portfolio because he is bullish on those sectors. . . .The problem was that his account with VALIC got lost in the shuffle when the rep he had used for years was fired and the next rep left the company voluntarily.

While he no doubt thinks he has made money by being bullish on commodities, the fact is that he could have made just as much money by being bearish on the dollar and stuffing Euros under his mattress.

The dreaded VALIC ... don't get me started on their problems, especially since they have been hijacked by their new owner AIG. Get him out of there, even if it means going to Ameritrade (which is probably a good choice, for retirement accounts, because the only 1099 you have to worry about is the 1099R).