Discussion:Puts and Calls
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Discussion Forum Index --> Basic Tax Questions --> Puts and Calls
Discussion Forum Index --> Tax Questions --> Puts and Calls
| 9 December 2007 | |
| Can anyone help me with Puts and Calls? How complicated is this? Client tracks his own transactions.
Thanks. | |
| 9 December 2007 | |
 I thought so. Actually, the Table is quite straight forward. Of course, Wes might call it an 
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Ksnoopytax (talk|edits) said: | 9 December 2007 |
| It's actually not that complicated once you logic it out. The table Solomon linked to you is an excellent reference. If you are still having trouble with the concept, I would suggest getting a good tax reference guide such as the individual tax book found at http://www.quickfinder.com/. I usually buy one each tax season and it is full of well organized, easy to understand, tax topics for about $40 bucks. It had some explanations and a table in it similar to what Solomon linked. | |
| 9 December 2007 | |
| I don't understand what Dennis thinks is cruel.
If Judie needs more help she will say so. Maybe she will post an example that she wants help with. We have no clue whether she gets it or not, but Solomon went to a lot of trouble to link those 3 things to help her. He could have ignored the question altogether, but he wanted to help. | |
| 9 December 2007 | |
| Moved from user discussion page:
Hi Kevinh5 et al! Is this the way to reply to the advice you've sent on the P's and C's? Anyway, I have a 1099 showing ordinary int/divs/trades as well as non-reported activity such as purchases and option transactions. Hoping to find out that the op trans did or did not need reporting by taxpayer and, if so, only needed to enter data from 1099. Checked Quikfinder and Pub 550 and got completely confused as to how and what to report if anything! Client supplied his own summary but is totally different from 1099 info. Thanks to all of you for your time given, it's very much appreciated! | |
| 10 December 2007 | |
| You guys have fun. Thanks anyway. 08:40, 10 December 2007 (CST) | |
| 10 December 2007 | |
| Judie, did you even bother to read the links that Solomon posted? Your answer was there very clearly. | |
Death&Taxes (talk|edits) said: | 10 December 2007 |
| I tend to take a deep breath when a client gives me a brokerage summary with puts and calls, and note that some brokers will also provide a schedule of gains and losses which include these non-reported transactions (that may be why your client's information does not agree with the 1099B....these transactions are not reported to IRS but must be included on the return....note that in some cases the proceeds of sale are reduced by the put which would mean the proceeds reported are less than the 1099B).
I think it is the semantics that throw me when I encounter this: who is a holder and who is a writer? (you can see that I do no investing). I have usually found that clients that play the market do know what they are doing when I check their work and plod through the chart. | |
| 10 December 2007 | |
| I don't have a clue how to help someone who can't recognize a non-equity option on sight. My wife has a couple of these clients and I tell her just to use the client's schedule. You can't charge enough to analyze. The major firms have the software to generate a complete profit/loss with the non equities actually segregated into long/short and opens marked to market. With something like E-Trade ...(?) | |
| 10 December 2007 | |
| If they excercised the option and sold the stock it should be on the 1099 B. If they did not excercised it and it expired take the loss (of premium paid for option). If they excercised the option and hold the security (in a call)keep track of basis and report when sold. | |
Death&Taxes (talk|edits) said: | 10 December 2007 |
| What you have to watch for is clients not giving you the entire Tax Reporting Summary, as most firms call these year end 20 page documents. The non-reported transactions usually follow the schedules of dividends, interest, gains and losses and if there is a disconnect, it's usually because the client wants to cover up additional profits made on puts and calls (usually calls). Always look at the summary of investment activity on these reports, rather than simply dropping the numbers from the gains and loss schedules onto the return. | |
| 10 December 2007 | |
| Ah, David, you will find if you ask for the separately generated profit/loss that these two statements rarely match. ♫ | |
| 10 December 2007 | |
| D&T : 'these transactions are not reported to IRS but must be included on the return' Bingo ! I love showing my clients how much their broker made off of them last year vs. what they made. I get irked when a broker doesn't provide a detailed P/L, even with the ole stamp 'for Information purposes only, Not for your tax records'.
judie: 'How complicated is this?' Depending on your software and your personal knowledge, it can be very complicated. A young guy always posts ' do not replace software for knowledge.. (para phrasing), at least he looks younger than me, hehe Good Luck | |
Death&Taxes (talk|edits) said: | 10 December 2007 |
| Hey Tex: back before investment houses gave gains and loss statements, this broker tried to do just that to me....not show me the trades that were not reported. Even today he claims the statement from his employer is rife with inaccuracies....in some places he is right, especially on mergers, but that is not what he is saying...he means it shows too many gains. | |
