Steve M Posted June 1, 2009 Report Share Posted June 1, 2009 I have a client who just handed me a brokerage statement with almost 125 options trades for 2008. Is there an alternative way of recording these transactions besides putting them individually on the Schedule D? The statement shows the total gain for the year (all short term) and I know that options transactions information is not provided to the IRS, so I wondered if there is an easier way of doing this? Steve M Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted June 3, 2009 Report Share Posted June 3, 2009 Follow the instructions: http://www.irs.gov/pub/irs-pdf/i1040sd.pdf taxbilly Quote Link to comment Share on other sites More sharing options...
ed_accountant Posted June 3, 2009 Report Share Posted June 3, 2009 For my clients that trade or that use brokers that trade, I often attached the broker prepared statement or the client prepared statement to the return and mail in the return. On Schedule D, I note in the description, see attached. I also complete the total sales, cost basis amounts, and list "various" for the dates. I have done this for years and never had a problem. Quote Link to comment Share on other sites More sharing options...
jainen Posted June 4, 2009 Report Share Posted June 4, 2009 >>On Schedule D, I note in the description, see attached.<< I agree with taxbilly, one should follow the instructions. I truly am mystified as to why a preparer would do it the way ed says, ignoring the specific line that IRS has put on Schedule D to summarize such attachments. I would guess not a single one of the returns ed does like that could be processed by the IRS computer. In my opinion, it is always a BIG problem whenever IRS examiners are taking a personal interest in any client's return. I just wonder if ed discloses to his client that he chooses to ignore plain instructions, guaranteeing that the client's return will be examined. Quote Link to comment Share on other sites More sharing options...
Don in Upstate NY Posted June 4, 2009 Report Share Posted June 4, 2009 There is nothing wrong with using an attachment for the details of the Schedule D transactions, IF that attachment contains the data the IRS wants in the correct format. The instructions and forms have been clarified over the past several years to explicitly permit what many preparers had been doing anyway, especially with e-filed returns. What is certainly NOT permitted is a summary without the attachment, such as "Details available upon request". While some believe that the IRS computers will the match individual transactions reported on 1099-Bs with line items on the Schedule D, the conventional wisdom seems to be that the IRS will not issue a CP-2000 unless the total sales on the Schedule D are less than the total sales on the sum of all the 1099-Bs received by the IRS. The original posting specified option trades, which are usually NOT reported on a 1099-B. Because option trades are not individually reported to the IRS, do we think that they need not be individually identified on the Schedule D or attachments? Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted June 4, 2009 Report Share Posted June 4, 2009 The instructions are clear as to how to report a sale of a capital asset. An option is a capital asset. I had a client years ago who did his own return on Turbotax. He reported his options as: various, various, various, selling price and cost. And then he wondered why he got correspondence from the IRS, because after all he had a $50,000 loss. taxbilly Quote Link to comment Share on other sites More sharing options...
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