How do I file a federal return for day-trading losses? I won some, I lost some, but I finally cut my loss and withdrew my remaining balance which was about 65% less than my original starting capital.
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Anonymous
ANSWERS: 2
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You'll need a Schedule D. The top portion of the form is stocks which you purchased and sold within a short period of time. The bottom portion of the form is for stocks which you purchased and held over a long period of time. The line of demarcation between short term & long term is specified on the form. I believe it's a year, but I don't have the form in front of me to verify that. You'll need to know: a) when you purchased the stock b) when you sold the stock c) total you paid (including broker fees) d) total you received (minus broker fees) When the form is completed, the net profit or loss is added to the main 1040 form and added/subtracted from your taxable income. Here is an FAQ from the IRS http://www.irs.gov/faqs/faq-kw163.html
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You can also go to any financial investor service (am I allowed to suggest one???) like, Edward Jones Investments, and they will help you with all of the red tape involved with this type of loss/gain/IRS filing. They will also point you to, and file for you, other financial benefits that you are likely entitled to with regard to gains or losses, or perhaps, sometimes offer an alternative "shelter" for you by reclassifying or reinvesting "losses" or gains. They offer a very effective, low cost service and maintain IRS records for you in case you are audited. They will even represent you in an IRS audit for any of the paperwork filing they have put together for you on your behalf.
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