IRS schedule D question (maybe Z knows?)??

DaveinJapan said: "When filling out schedule D, I was wondering if you have to list each individual purchase of a security even if you accumulate for a while and then sell it all? In other words, for example I bought Microsoft last year several times ("bought on the dips") and then sold it all about a month later. Do I need to list each individual purchase and then divide up the sale price and list them all individually? I'm assuming the answer is YES, I have to, since that would require typical IRS "max pain"...but I was hoping there might be a way to put them all together into one single "cost basis" and "sale". Of course, that would be too easy! Also, for schedule D1, can you just use as many pages as needed? I'm thinking I might need 2 or 3 (at least!). If so, do you need to do anything special like write "page 1 of 3", "page 2 of 3" or anything like that? Z...considering your day trader ways, you must have to file like 20 pages of that junk!! Ugh. Maybe buy and hold ain't so bad after all. :p Thanks in advance. (any other comments or advice about reporting short term capital gains would be much appreciated too!)"

DaveinJapan said: "One more thing, I noticed that my records always note the sale date, but my brokerage lists the settlement date. Which are you supposed to use on the schedule D form?"

LongArm said: "[QUOTE=DaveinJapan]When filling out schedule D, I was wondering if you have to list each individual purchase of a security even if you accumulate for a while and then sell it all? In other words, for example I bought Microsoft last year several times ("bought on the dips") and then sold it all about a month later. Do I need to list each individual purchase and then divide up the sale price and list them all individually?[/quote] No, you would just enter the total cost basis for all of your Microsoft purchases (enter "various" for the date), then enter the proceeds from the sale of all of them and then your gain or loss. This is assuming you sold them all at the same time. [quote]Also, for schedule D1, can you just use as many pages as needed? I'm thinking I might need 2 or 3 (at least!). If so, do you need to do anything special like write "page 1 of 3", "page 2 of 3" or anything like that?[/quote] You can use as many as you need. You're supposed to use the Continuation Sheet For Schedule D, which should be available for download from the IRS' website. [quote]One more thing, I noticed that my records always note the sale date, but my brokerage lists the settlement date. Which are you supposed to use on the schedule D form?[/quote] Sale date."

DaveinJapan said: "Excellent. Very clear, thank you much. :)"

DaveinJapan said: "In case anyone was wondering, this is "paperwork/taxes" weekend from hell. :angry: Figured I might as well get it over with (I actually have til June 15th, because I live in Japan...but April 15th still kinds "looms"). So, in case I throw out any more dumb questions, you'll all know why (assuming anyone is around...I imagine most are off ENJOYING the weekend! :flipoff: )."

DaveinJapan said: "One more question, if I may. Is it okay to put the sale date as "various" if you bought all at the same time but sold on seperate occasions (this occured twice for me), or do you need to separate them out? In my case, I sold on two seperate dates both for profit on the first one, and the other one I sold on 2 seperate dates for a loss on both but I purchased the security in full 2 months prior so there's no issue with a wash sale or anything."

thezster said: "Sorry I missed the original question - but LA, naturally took care of it. My only concern is with the term "various". I have used that in the past with no problems (ie. audit). However, [I]and I have nothing to back this up[/I], I am under the impression that "various" would not be allowed any longer beginning this year. As I had Gainskeeper offered for free, I took advantage of that and didn't risk the old method. Anyone with better info?"

DaveinJapan said: "Oi! Well, I'd better straighten that out in any case (already started filling out "various" on my forms!! back to the drawing board lol). I'll probably just call the IRS directly if I don't get a definite answer...but Z, about my last question, have you in the past used "various" to explain a security that you bought all at once but then sold on various dates? Just as a starting point (so I don't bother filling it out that way if it's not an option at all). What is "gainskeeper" anyway? Software?"

thezster said: "How do I figure the cost basis when the stocks I'm selling were purchased at various times and at different prices? If you can identify which shares of stock you sold, your basis is what you paid for the shares sold (plus sales commissions). If you sell a block of the same kind of stock, you can report all the shares sold at the same time as one sale, writing VARIOUS in the "date acquired" column of Form 1040, Schedule D (PDF). However, what you enter into the "cost or other basis" column is the total of all the acquisition costs of the shares sold."

DaveinJapan said: "While I have the microphone here, can I ask another dumb question? Does it matter in what order you list your trades? I mean, I'm basically going down the list based on the date of purchase (or the first date of purchase in the case of multiple buys), but the sell dates are way off anyway in many cases. Does it matter? Is random okay? Just as long as you put all the trades on the list, I mean? Since this is quickly becoming an annoying thread (I'm sure!), if people would rather I look elsewhere is there any particular "tax" message board anyone might recommend? I'm still waiting for the dreaded "talk to a tax guy" reply, but since I don't speak no japanese the tax guys around here aren't much help lol."

thezster said: "[QUOTE=DaveinJapan]Oi! Well, I'd better straighten that out in any case (already started filling out "various" on my forms!! back to the drawing board lol). I'll probably just call the IRS directly if I don't get a definite answer...but Z, about my last question, have you in the past used "various" to explain a security that you bought all at once but then sold on various dates? Just as a starting point (so I don't bother filling it out that way if it's not an option at all). What is "gainskeeper" anyway? Software?[/QUOTE] I have done so in the past but wouldn't do it today... gainskeeper is a commercial software program that downloads your trading activity automatically from your broker, figures your profits/losses/wash sales/etc., and prints out a nice neat proper form for the IRS when needed...."

thezster said: "[QUOTE=DaveinJapan]While I have the microphone here, can I ask another dumb question? Does it matter in what order you list your trades? I mean, I'm basically going down the list based on the date of purchase (or the first date of purchase in the case of multiple buys), but the sell dates are way off anyway in many cases. Does it matter? Is random okay? Just as long as you put all the trades on the list, I mean? Since this is quickly becoming an annoying thread (I'm sure!), if people would rather I look elsewhere is there any particular "tax" message board anyone might recommend? I'm still waiting for the dreaded "talk to a tax guy" reply, but since I don't speak no japanese the tax guys around here aren't much help lol.[/QUOTE] Order doesn't matter - but, a nice neat return is helpful, in my opinion, to avoiding the dreaded audit.... I used to download everything into Excel, then sort by stock - then sell date - to produce my forms...."

DaveinJapan said: "Thanks, Z. What I'm getting from that quote is that "various" is not really usable for a sale date? You need to list all that junk bit by bit? (maybe I'm not reading it correctly, but that's how it sounds to me...you can use "various" if you bought here and there, but ONLY if you sold it all together...like LongArm said)???"

DaveinJapan said: "[QUOTE=thezster]Order doesn't matter - but, a nice neat return is helpful, in my opinion, to avoiding the dreaded audit.... I used to download everything into Excel, then sort by stock - then sell date - to produce my forms....[/QUOTE] Makes sense. In my case though, last year I didn't have ALL that many trades after all (made it to a second suplimentary page by ONE trade :p)...so I don't have too many "same stock" orders or anything like that. Just a couple. Maybe next year. :)"

thezster said: "[QUOTE=DaveinJapan]Thanks, Z. What I'm getting from that quote is that "various" is not really usable for a sale date? You need to list all that junk bit by bit? (maybe I'm not reading it correctly, but that's how it sounds to me...you can use "various" if you bought here and there, but ONLY if you sold it all together...like LongArm said)???[/QUOTE] I would say correct - as the various sale dates are what is provided by your broker."

DaveinJapan said: "10/4 Thanks for all the advice, Z (and LongArm as well!!). I'll go ahead and fill out the forms using these guidelines for now...if anyone else has any thoughts to add, it'd be great! (question for next year...how the heck do you fill out short sales? I mean, they ask you to write "100 sh. MSFT", for example...so do you write "100 short sh. MSFT" and then reverse the cost basis/sale?? that's pretty confusing!)"

LongArm said: "[QUOTE=DaveinJapan](question for next year...how the heck do you fill out short sales? I mean, they ask you to write "100 sh. MSFT", for example...so do you write "100 short sh. MSFT" and then reverse the cost basis/sale?? that's pretty confusing!)[/QUOTE] I'd just put "100 (Short) MSFT." You don't really need to reverse anything--a short sale is a sale and a buy to cover is a buy, so you'd report them as such. The only difference is that the dates will be in reverse the normal order. As to your previous question, I agree with Z--I don't believe you can mark the sale dates as "various." Only purchase dates."

DaveinJapan said: "Forgive me for being dense here, but I want to make sure I'm understanding this... So, I had a couple of covered calls when I owned FTO... Description = 1 FTO covered call contract Date Aquired = June 11th (date "bought to close"??) Date Sold = June 5th (date "sold to open"??) Sales Price = $1,200 ("sold to open" price - commission??) Cost Basis = $1,000 ("bought to close" price + commission??) Gain or Loss = $200 (profit??) I have the feeling I'm totally backwards on this! :signs053: In any case, that would work the same in the case of an outright short sale? I do understand there are specific rules on where to write "expired" for options, but that wasn't the case for my covered calls anyway... Thanks for all the help!! (this is important for next year in particular, as I've sold short a few times and need to know how to document it!)"

DaveinJapan said: "Sorry, but can someone just confirm that I'm correct on this (dates, cost basis, etc...for options and short sales)? I'm just finishing up, and this is the last detail. Thanks. :)"

thezster said: "Can't help with the options portion... for shorts.... it's the same as for longs... sale date - purchase date - price difference - profit..."