Multiple Stock Transactions, and I mean multiple!

[Safire]

I'm guessing close to 100 stock transactions on a 1099b from Ameritrade, do I have to list each one or can I lump long and short term gains and losses together?

I think I remember reading here that someone had done it that way for years.

Thanks in advance.

Safire

[Koss]

Substitute Schedule D

You can enter gross proceeds and basis for long and short term transactions. So you are entering one short term transaction and one long term transaction. For the dates, use "various."

In the field that asks for a description of the property, put the phrase "see Substitute Schedule D."

The supplemental data that comes with the 1099-B may be sufficient for this purpose; it may not. You or your client might have to produce something a bit more intelligible, using Excel, Quicken, QuickBooks, or something else.

The final step is to tell your software that you are attaching the "continuation sheet," or Schedule D-1. This will generate Form 8453, which will need to be physically mailed to the IRS, with the attachment, after you have a DCN.

With Form 8453, you mail a photocopy of the supplemental data from Ameritrade, or a printout from Excel, or whatever you end up using to substantiate the summary totals on the return.

[Koss]

Authority

FYI: This procedure is explicitly authorized by the IRS instructions for Schedule D.

[Edsel]

Sch D Continuation

List each sale.

Last week I had an E-trade guy who made 194 sales. Received a 1099-B from E-trade for over $1.5MM.

I believe we are suipposed to list every sale. I was thankful for the opportunity to bill him an extra $180 for listing and balancing his long list.

[JoshinNC]

I charge $24.15 for the Sch. D

and another $3 per entry. I put every single one of them in there and then bill the client accordingly. It's a cost of owning the shares.

[LMathey]

In order to be fair to the client, follow what Koss recommends. It is exactly what I have done for years and for many clients that have multiple brokerage accounts. Just identify each clearly. If filing a paper return I put "See attached Merrill Lynch #33333" on description line, separate by long and short term sales and then attach detail provided by brokerage firm.

[sea-tax]

and another $3 per entry. I put every single one of them in there and then bill the client accordingly. It's a cost of owning the shares.

Josh I agree, I do it the same except I charge $10/line. If the client wanted the simple act of transposing numbers from one page to another, they could hire a monkey. I not only put in each line item but then I analyze the information for the client. I let them know just how much they made and lost , what the fees were and what the R.O.C. is and other items . Clients expect me to provide more than just the basics.

Nice thing is for clients that I manage money for I charge a flat $50.00 per schedule d 1 transaction or 100 transactions, but if you go to another broker it is $10 per line

[Bees Knees]

In order to be fair to the client, follow what Koss recommends. It is exactly what I have done for years and for many clients that have multiple brokerage accounts. Just identify each clearly. If filing a paper return I put "See attached Merrill Lynch #33333" on description line, separate by long and short term sales and then attach detail provided by brokerage firm.

I agree it can be done that way. However, a word of caution if you choose to do it this way. The Schedule D instructions say:

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.

What does similar format mean? To me it means it has to look like a Schedule D or D-1. I have yet to see a broker statement look like one. They always manage to change the order around and inject irrelevant stuff. They manage to change the format just enough to make them confusing.

I don't think it is being unfair to the client to charge them to re-enter everything. It's called following the Schedule D instructions.

[Larmil]

I agree it can be done that way. However, a word of caution if you choose to do it this way. The Schedule D instructions say:



What does similar format mean? To me it means it has to look like a Schedule D or D-1. I have yet to see a broker statement look like one. They always manage to change the order around and inject irrelevant stuff. They manage to change the format just enough to make them confusing.

I don't think it is being unfair to the client to charge them to re-enter everything. It's called following the Schedule D instructions.

I agree. But, rather than entering everything myself I offer the client a spreadsheet template for them to enter which can be imported to the D-1. Some use it. The others I charge for re-entering.

[S T]

Stock Trades

Saffire,

I have you beat, I just spent the "entire" day entering stock trades on a t/p that is under those managed adivsory accounts. Total entries "674"

I am not going to do this again. I can't charge enough to spend an entire day at the "crunch time"

Don't know what I will do the next time, as the brokerage sheets do not follow the format of the Schedule D, as Bees stated in a prior post, the columns are are not in the same order as the Schedule D, that is also why it took so long to input.

Interested in Matt's post, if he has not received any notices and has not sent the schedules in and only posts totals, then maybe that is the way to go.

I don't mind inputting a 100-150 trades, but 674 and on 3 accounts and then to watch balances since there are no subtotals.

Right now I need eye transplants!

Sandy

[S T]

Schedule D

Well much to my amazement, this t/p which ended up having 675 Schedule D entries, cleared efile today.

The t/p is not happy, his stock broker says because it is a managed account (3 separate accounts) all "I" have to do is enter the sub-totals and it would be accepted by IRS. The way I look at it, t/p hires the "stock broker" to manage his accounts for investment, and that stock broker is earning a fee, so the t/p should also pay me to manage "taxes" to make sure the reporting is accurate and I should also be paid a fee.

I even sent the t/p the IRS instructions stating the format that was needed, and he still believes his stock broker over what I say! I simply said that if he can convince his "brokerage house" to format their report to the same format that IRS requires, then I would only charge a copying fee, not a per line item charge for the Schedule D entries.

In the t/p best interests, it was a really "good thing" that I spent the time and entered each transaction, as the brokerage statements on the realized gain/loss DID NOT equal the total of the gains reported on 1099B. Took me a while to find them, so therefore should prevent any type of CP notice for discrepancy. If I would have used the realized/gain loss figures, I would have understated the capital gains/losses on the Schedule D.

Sandy

[Jesse]

I lost a very good client that has been with me for years for this same reason. His financial advisor sells/trades constantly. In the past 4 years I have not had less than 50 sched D entries and have not charged for my time because this client was one of my first and seemed like part of my family. Really nice people and except for the sched D the return is very basic. Actually I think they fee intimidated by the financial advisor and at the risk of feeling stupid they let him continue to "play" with their funds and I see very little gains.

I told him I would start charging for all these entries next year. Well, he talked to his advisor and according to him I am not a CPA and therefore not qualified to prepare tax returns. If I was a CPA I would know that I could attach a summary and the individual entries are not necessary.

[S T]

Clients

Jesse, Sorry you lost your client and

Well I hope I don't lose this client, but the Stock Broker is actually providing a better word argument than I am. I have sent the IRS regulations, and still being questioned. The taxpayer just doesn't get it.

Maybe the Stock Broker should offer to prepare the t/p return? I know I am not as well paid as the Stock Broker. He didn't even post his charges on the Broker Advisory Sheets and we had to request the amounts so I could use as an Investment Deduction. Think there was a "reason" for that!

Wonder if the t/p looked at those fees and will compare them to the bill I am going to send?

Sandy

[erchess]

Two Questions

For anyone - I thought brokerages normally included the transaction fees in the prices they give as bought for and sold for. Is that not correct?

For Bees - why does the format of a statement have to be exactly like the IRS statement to be a "similar format".? I could argue with a straight face that my format was similar as long as it was made of of consistent rows and columns. (Is there some reason I am overlooking why getting tagged for non compliance would be more than a minor problem?) I also don't see the purpose behind letting us not use SCH D unless something most brokers will willingly and cheaply provide will be accepted. Aa you know, when the income tax first started during the Civil War, the Government provided Instructions but no Forms. When you sat down to prepare your income tax you or the government agent to whom you were talking began with a clean sheet of paper, a nibbed pen, and a pot of ink. Eventually it was found necessary to create instructions AND forms and that is where we are today. There would be no gain for anyone in allowing for example a Substitute Schedule A or F1040 but I could see a use for a substitute Pg one of Sch E if Rental Management Companies spat out statements that would serve the IRS''s needs.

[outwest]

What similar means..

Trying to understand what the IRS is thinking is in the same category as analyzing your spouse but here goes...

Similar means that the broker statement contains the same basic elements of the Sch D-1: Dates bought and sold, purchase price, and sale price. Similar allows the column sequence to be different (maybe?) I think grouped and totaled by short and long term is necessary also but not sure.

As to the brokers that want the taxpayer to just use the summary: I simply pause, sadly shake my head, and say " So sad when people remembering out of date information advise outside their area of expertise."