This tax season — the one that just ended for those lucky enough to have filed on time, and the one still painfully dragging on for those who filed for an extension — is the first for which brokers are required to report cost basis, in addition to gross proceeds, on Form 1099-B. An important part of the requirement is that brokers must apply the wash sale rule, which prevents you from claiming a loss on a sale of shares if you buy identical shares within 30 days before or after. Anyone who does a lot of buying and selling might wonder whether the broker applied this rule correctly. You may be surprised to learn that there’s no way to be sure. The wash sale rule is a lot more complicated than it appears, and there are unanswered questions about some aspects of its workings. (more…)
Free Online Guides
Other
Resources
About
Fairmark.com
Archive for the ‘Trader Taxation’ Category
Coming Clean on Wash Sales
May 10, 2012
By Kaye A. Thomas
May 10, 2012
By Kaye A. Thomas
Tax Court Says Day Trading Is Dissipation
March 25, 2011
If you find yourself owing the IRS more than you can possibly pay, you may be able to settle for a reduced amount through a procedure called an offer in compromise. The IRS doesn’t always agree, however. Among other possible reasons, they may reject an offer in compromise if it appears you dissipated assets, consuming or wasting money that could have been used to pay your debt to the government. In a recent case, the Tax Court ruled that the IRS can treat losses incurred in day trading as dissipation. The result is unusual because people who take up day trading generally do so with the thought that they’ll make a profit, rather than fritter money away. (more…)
March 25, 2011
If you find yourself owing the IRS more than you can possibly pay, you may be able to settle for a reduced amount through a procedure called an offer in compromise. The IRS doesn’t always agree, however. Among other possible reasons, they may reject an offer in compromise if it appears you dissipated assets, consuming or wasting money that could have been used to pay your debt to the government. In a recent case, the Tax Court ruled that the IRS can treat losses incurred in day trading as dissipation. The result is unusual because people who take up day trading generally do so with the thought that they’ll make a profit, rather than fritter money away. (more…)
Friday Wrapup
July 23, 2010
Tax news of interest to investors came mainly from the courts this week, though the IRS gave paid tax return preparers something to groan about. (more…)
July 23, 2010
Tax news of interest to investors came mainly from the courts this week, though the IRS gave paid tax return preparers something to groan about. (more…)
Part-Time Gambler Is Professional
July 20, 2010
In a summary opinion, the Tax Court has found that an individual can qualify as a professional gambler despite pursuing the activity part-time. While the decision doesn’t have precedential value, it should help inform us in determining who qualifies as a professional trader. (more…)
July 20, 2010
In a summary opinion, the Tax Court has found that an individual can qualify as a professional gambler despite pursuing the activity part-time. While the decision doesn’t have precedential value, it should help inform us in determining who qualifies as a professional trader. (more…)
Fairmark.com is your source for news, features, free online guides and other resources dealing with taxes and investing. To stay current, sign up for our free newsletter.
Our books
| That Thing Rich People Do |
|
The fastest, easiest way to learn the principles of investing. |
| Go Roth! | |
|
Our complete guide to Roth IRAs and Roth accounts in 401k and 403b plans: choosing, creating, building and using these accounts. |
| Consider Your Options | |
|
A plain-language guide for people who receive stock options or other forms of equity compensation. |
| Equity Compensation Strategies | |
 |
A text for financial advisors and other professionals who offer advice on how to handle equity compensation including stock options. |
| Capital Gains, Minimal Taxes | |
 |
Tax rules and strategies for people who buy, own and sell stocks, mutual funds and stock options. |
A publication of Fairmark Press Inc.
Copyright Kaye A. Thomas 1997 - 2012