I hesitate to ask this but here goes....

[gottago]

OK, the settlement officer working our OIC told attorney that we need to file original (with schedules) returns for 3 of the years in the OIC. Apparently frivolous returns can not be amended, even though the amended returns filed 8/06 agreed with the irs figures.

I have most of the information (interest, property tax, W-2 etc.) A friend was kind enough to give me all of his old Turbo Tax software which will help.

Additionally I managed to unearth the account name and password for 1 of the online brokerages (Ameritrade) that was used for day trading for one of the years in question. I already had the 1099-B statement of all the proceeds (about 500 transactions totaling 4.6 million and the "buys" for the year (about 300) are on the website and I have downloaded them onto my computer. Who knew...

Now, on TurboTax you have to enter each individual sell transaction (amount and date) and cost basis (amount paid and when purchased) which will take a long time but this is what I will do if I have to. However, some various websites say there is some software you can use to do this for you by just downloading the data from the brokerage into it and it figures the gain or loss and answers the question about wash out sales. The TurboTax disc mentions Quicken/Quicken Books but I do not have this software.

I know some of you are tax accountants. I just want to know if there is a specific software program you can tell me to use or buy that is capable of doing this. If not I will attempt to enter them one at a time. Another question is if I went to a local tax accountant with all this information printed out or on a disk would they be able to do the back returns or would they freak out since it appears, at least to me, to be a mess.

Thank you.

[gezco]

Don't even try to get 500 transactions into turbo tax. That will not end well. Inport the transactions into access or excel and prepare a schedule that has the same information as the scheduale D. Then on the D, enter it has one short term and one long term transaction. In the description put "see schedule X".

[Nikki]

From a belt and suspenders standpoint, I suggest you try to get hard-copy details of the account transactions on Ameritrade letterhead.

That will spike any possible thought you are attempting to fudge the numbers in your reconstruction AND will give the IRS person something for comparison.

Remember, you are digging out from filing fraudulent returns. Anything you can do to substantiate your credibility will be a plus.

[.]

Who knew

I did, which is why I quoted the obscure SEC rule requiring data retention and the fact that in actual practice most brokers keep this data virtually forever and that you could get the data relatively easily. You weren't interested because it was all water over the dam and too late to do anything about it.

The spreadsheet suggestion is a good one. 10 times as many transactions as you have wouldn't bother any decent spreadsheet. It's also rather unlikely that any transaction remained open for 366 days, so everything is likely short-term gain or loss.

You're lucky that they don't accept amendments to frivolity. You can now prove that there was no ~$5 million gain, but a ~$50K loss, and the real tax due was a much, much smaller number. Which may not positively affect the consideration of your OIC, but it certainly can't hurt.

[webhick]

while OpenOffice is a bit less.

Less as in Free. http://download.openoffice.org/common/i ... s.html#win

[Demosthenes]

Have you ever used a spreadsheet before (such as Excel)?

[gottago]

I have never used a spreadsheet and am trying to understand the law/IRS rules as they apply to day trading. I basically have 2 sets of information:

Date/stock name/number of shares/purchase price for all "buys" for year

Date/stock name/number of shares/sell price for all "sells" for year

I know there are rules about "wash out" sales and since many of the same stocks were bought and sold repeatedly (sometimes in the same day) I am hoping to find a program that helps determine what is gain and what is loss but this may not exist. There is also something about "mark to market" election but I don't think this was chosen.

Thanks everyone for your help

[gezco]

Mark to market is the easiest way to handle this. It’s unlikely that this was done. You have to make the mark to market election by April 15 of the year you want the election to be valid. If you were formally a TP, it’s unlikely this was ever done.

Sorting the transactions in excel and applying the wash sale rules won’t be that hard for someone who knows how to use excel. It will take a fair amount of time.

Edit: Did you make much day trading?

[webhick]

I have never used a spreadsheet

Crap.

I think I found a program that can generate a schedule D for you. It will allow you to import from Excel (and a few other formats, it looks like) and export to TurboTax/TaxCut.

It's called SimplyTrack I'm not sure how good it is (this stock stuff is all Greek to me), but it's got a 20 day free trial ($50 to purchase). Perhaps someone else here with more experience can look at it to see if it's doing things right.

[.]

"wash out" sales

"Wash" sale. Purchasing the same security you sold within 30 days of the date it was sold. Designated as such to prevent the taking of a loss for tax purposes in a given tax year, while continuing to hold the investment, albeit with a break.

Wash sales aren't a factor unless a loss was taken near the end of a year and the same security repurchased after the first of the next year.

"Day trading" doesn't matter, it's just another term for short-term capital gains/losses. "Mark-to-market" doesn't matter unless an election was made.

Add the broker's commission to the total puchase price on the buy side, subtract it from the sale proceeds on the sell side, what's left is the net gain/loss on the trade.

Simple, but tedious. IIRC, Ameritrade was 8 bucks a side back then. There's $6,400 of loss on 800 trades before you even get into purchase and sales prices.

[.]

Did you make much day trading?

LOL. Her idiot husband, according to her, lost 50K. Totally predictable, because 90% of all day-traders lose money. When you add to that the fact that this was a guy who bought Schiffty's BS, that he lost his ass is even less surprising.

[jg]

Add the broker's commission to the total puchase price on the buy side, subtract it from the sale proceeds on the sell side, what's left is the net gain/loss on the trade.

If you had any holdings at the beginning or end of the year modify the above to adjust for those holdings:

Add the broker's commission to the total puchase price on the buy side (minus the cost of any holdings at the end of the year, if any) (and plus the cost of holdings at the beginning of the year), subtract it from the sale proceeds on the sell side, what's left is the net gain/loss on the trade.

Hope this helps.

[.]

modify the above to adjust for those holdings

Only if a mark-to-market election was made. The chance that that happened is approximately .0000000000000001%.

In the real, non-TP world, the only thing that matters is actual sales, and whatever any other holdings (as if he had any "holdings" except possibly by accident at year-end) may have been matters not.

[Imalawman]

I just can't believe that you can't get this breakdown from the brokerage firm you used. In college one my jobs was actually compiling these spreadsheets. I used excel and a constructed some macros to speed the process up. Long story, but the point is that every customer recieved a copy of what you're looking for. I would seriously continue to hound ameritrade for such a breakdown. (as kickback pointed out, you'll need your husband to get them)

[.]

I would seriously continue to hound ameritrade for such a breakdown

And you would be wasting your time. Brokers don't do "breakdowns" that mean anything to any given taxpayer. They don't know if you have designated any particular shares to be sold in any given case, or whether you routinely use LIFO or FIFO. The can only provide the basic data.

[.]

Let me expound a little further on that. What you may have been doing is custom work for a broker providing a highly personalized service to clients.

What I'm talking about are internet brokers like Ameritrade, which was the broker used by gottago's husband, and which are all notorious for their total lack of any ability whatsoever to do anything remotely like what you described.

[jg]

modify the above to adjust for those holdings

Only if a mark-to-market election was made. The chance that that happened is approximately .0000000000000001%.

In the real, non-TP world, the only thing that matters is actual sales, and whatever any other holdings (as if he had any "holdings" except possibly by accident at year-end) may have been matters not.

The adjustment is needed to account for any trades that straddled the year end even if there is no mark-to-market (also please note it is the cost of the holdings that is being used in the adjustment).

For example, the case is that I begin trading on December 15, 2005 and purchase 100K cost of stock in year 2005 (selling none in 2005) and then purchase and sell stock on a short term basis (holding for no more than 30 days) throughout 2006 for 2M cost and 3M sales prices; except from December 15, 2006 to the end of the year I do not sell 50K cost of purchases made in December. My vacation each year is from 12/15 - 12/31 so I do not trade in that period.
The 100K cost I had from 2005 purchases were all sold short term in 2006; and the 50K purchases were not sold in 2006. Indeed, it is the actual sales that are counted.

By using the difference between pruchases and sales and disregarding holdings the gain computed is 3M - 2M = 1M (broker fees included in cost to simplify the example).
Adjusting for the holdings gives a gain of 3M - 100K -2M + 50K = 950K.

The amount of the adjustment may or may not be large for frequent traders (and was 5% of the gain in the above example); but the adjustment is always appropriate for a more accurate net gain.

[Demosthenes]

Anyone have any thoughts on the inexpensive Schedule D prep software out there such as this one?

http://www.tryusonline.com/SD/index.php

I'm an Excel junkie so have never used Sched D software.

[jg]

Whether or not any software will be useful may depend if the transactions for the prior years in question are available in a digital format.

Though I do not have time to assess one for this task, most that I have seen are only built to use the current year transactions and renew the subscription each year. (Gainskeeper is one example)

It is worth inquiring of the vendor for the ability to use prior year data (or produce the prior year Schedule D).

Hope this helps.

[gottago]

On the Ameritrade site there is a button for "gain/loss" powered by a software program called "gainskeeper" that you can apparently get a report that satisfied the schedule D requirement.

This appears to be exactly what I need but the information is only available for accounts from 2004 to present. SH@T!! This account was opened in 2002 and closed in 2003. I am looking now at the possibility of buying this software or if that does not work I will just do it by hand I guess. Shouldn't take more than 6 months

Double SH@T!! It costs $379.00...