confused about Sched. D

[MZB]

I am confused about doing my Sched D (I use TT). I make about 150-200
stock/options trades each year. I log them on a spreadsheet. In many
cases, I sell covered calls and the shares get called away. What I
always do is reduce my cost by the option premiums.

When I did my taxes, I always wrote SEE ATTACHED and listed my total
costs and total selling prices, and I would attach my spreadsheet. This
year, the forms look confusing. All my trades are done via Ameritrade
and I’m not sure the 1099B will match (depending on how they do the
options).

Any advice on the simplest way to do this for 2011. The forms look so
different.

Mel

[Arthur Kamlet]

This year, as you have discovered, the Schedule D does not report
individual trades. Rather it reports summaries from Form 8949.


Form 8949 can report Long Term or Short Term, and a) Where Basis is
reported, b) where basis from stock sales is not reported, and
c) neither a nor b, such as a house sale or reporting the closing trade
of a call or put.


So in theory, there can be 2 x 3 = 6 separate Form 8949, and each
8949 can have many pages.,


I am hopeful the brokers will each supply 1099Bs in the same format
as the form 8949. and I can just attach them to the paper return or
to the efiled return using form 8453 as an attachment transmitter.


If they don't it's going to be a royal mess, and if some brokers
report nicely and others don't, those others are going to lose clients.
--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

[MZB]

Let me elaborate here. The 1099B will not be accurate (I just checked
with Ameritrade). It will not include options and it will not adjust for
the option premiums on stocks that are called away Also it will show
some wash sales that really have no impact. (Those losses are then added
to the repurchase shares' cost basis and then those shares are sold so
there is no loss to disallow).

So, I guess my question is this: can I just do as I used to do? Say SEE
ATTACHED and put the bottom line figures on to schedule D and attach the
spreadsheet.

Mel

[MZB]

Art:

But the 1099B will still not be correct due to the adjustments regarding
covered call assignments, etc.

I think I'm going to do the form 8949 as Basis not reported and attach
the spreadsheet (which clearly delineates each trade -- all of mine are
short term) and maybe include a statement to that effect. Also, the
1099B will denote some losses as disallowed due to wash sales, but then
this loss is added to my cost basis as I did ultimately dispose of the
rebought stock. This will indeed be a mess.

Does my reporting plan sound reasonable?

Mel

[Arthur Kamlet]

See my answer in the moderated tax group.