Video instructions and help with filling out and completing Can Form 4797 Broker

Instructions and Help about Can Form 4797 Broker

This is a green trader tax educational webinar these tax errors will cost professional traders dearly it's August 13 2016 I'm the presenter Robert a green I'm a CPA and managing member of GM trader tax and CEO of green trader tax this information is educational it's not intended to be a substitute for a specific individualized tax legal or investment planning advice where a specific advice is necessary or appropriate you may wish to consult with a qualified tax advisor CPA like myself attorney financial planner or investment manager which I am NOT errors are prevalent on tax returns for traders that's an unfortunate thing but it's a reality most active traders make serious errors on income tax returns whether they self prepare or engage a local accountant even a CPA many miss out on trader tax benefits and overpay on their taxes the cost ranges from five thousand to hundreds of thousands of dollars if you're relying on the tax loss insurance of Section four seventy five MTM where you can write off your losses as ordinary business losses rather than a three thousand dollar cap or loss limitation and get an immediate big refund check now in this presentation when I say preparer I refer to self preparers people who buy my guide use our website content you run TurboTax on their own and prepare their own tax returns they are a preparer and also I refer to accountants including CPAs who their businesses preparation only they don't know traders professionally enough here's the first error mistakenly believing you can rely on securities form 1099 around February March the securities broker mails you a big fat statement with all your trades if it's securities it's a simple one-page 1099 B for futures and that's easy my problem is with securities because IRS wash sale rules for brokers they may be simple but most people do not realize that IRS rules for taxpayers are different and more complex so don't rely on brokers for wash sale losses in most cases a wash sale losses tax-deferred when you buy back a security position 30 days before or after making a sale at a loss for active traders 30 days is eternity they buy and sell every day several times a week so you take a loss you get right back into a substantial identical position and the IRS says you can't deduct that loss you need to put it on to the basis of your next position and defer it they don't want you to gain the system with tax loss selling so IRS rules for brokers are simple brokers have a lot of compliance and the IRS does not want to overburden them here so they give them simple rules they say listen you broker you you just have to report identical positions on the one account but we're going to ask the tax payer to go the extra mile so most people don't realize that tax payer rules are different broker rules base wash sales on identical positions per account so you trade papal equity in the one account you don't have to look at your spouse's account you don't have to look at your IRA according to the broker no two brokers communicate Wasel information between them so brokers have an easy time complying with IRS rules for them but it's apples and oranges your rules are different tax payer rules base wash sales on substantially I positions across all accounts including IRAs even Roth IRAs so you have to look at your account your spouse's account your joint account your IRA your spouse's IRA your Roth IRA and salt use software to calculate wire sales on substantially identical positions across all those accounts that means Apple equity and Apple options and Apple options at different strike prices you need software to calculate wash sales correctly here's the problem prepare as including CPAs choose to play ignorant and import the 1099 be really the profit and loss information from the broker into the software like turbo tax with their professional software so then it's easy to reconcile the 8949 with the 1099 be they know the IRS computers are going to want to do that you can't take the easy way out you're non-compliant with the with the tax law and getting into trouble prepare CPAs are committing malpractice they should use trade accounting software that is compliant with tax payer rules in Section 10 91 those are the wash sale rules what's the big deal you use software for everything in your life you get the software you run it press a button it's done you can't play anything ran over that now with education coming from me and and others in our company traders can avoid war sales that is better than ignoring the tax payer rules and playing the audit lottery with the IRS so if you're running the right software you can see all these potential water sales going into December really what counts as a year end with taxable accounts you want to avoid the problem with I raised all year long because those have permanently lost those who are sales but with your taxable accounts you look at it in December and you see you have a wash sale problem in following securities you break the chain you sell those and you don't get back into those particular substantial identical positions for 30 days so then you don't have a wash sale problem education is the key not ignorance let's go to the next set of the deck the next problem messing up form 8949 cost basis reporting that's where you're making the wash sale loss adjustments on form 8949 now the IRS cost basis regulations make a mountain out of a molehill on form 8949 cost basis reporting and reconciling it with form 89 with reconciling the 8949 with the 1099 b as a problem I don't blame