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   PastimesInvestor Accounting

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From: HIA2/19/2010 4:31:34 AM
   of 19
This year I'm using the KBH Investor Accounting Supplemental Application to print out the realized trades in the one line format and then I'm constructing Schedule D continuation sheets with copy-and-paste and with text-file landscape printing. And the instructions for Schedule D do say that the tax filer can construct their own continuation sheets.

Just keep the trades entered throughout the year and then at the end of the year all the trades print out. Just quickly mark the long-term trades on the print-out by reading the purchase date throughout the print-out.

(If KBH Investor Accounting matches the brokerage statement each month, then at the end of the year the trades can be printed-out without mistake. However, the brokerage statement uses settlement dates while the IRS uses trade dates. So if inputting settlement dates, a trade date during the last three days of the year should also be given a settlement date on the last day of the year.

Now if inputting trade dates instead of settlement dates, the brokerage statement can be confirmed by putting the month-ending value on a security to be sold during the last three days of the month. Then once the brokerage statement is confirmed, the trade can be closed out with the trade date and the trade price.)

Of course the main purpose of KBH Investor Accounting is to track the investor's own enterprise result so that investor strategies can be confirmed or changed.

Now KBH Investor Accounting is professional in nature in that all aspects of the program are equal in importance and operation.

In all KBH Investor Accounting has a Portfolio book, a Register book of historical trades, a Mark-to-Market book of realized gain/loss combined with unrealized gain/loss, a Realized Accounting book of matched trades, and a Transaction input book.

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From: HIA3/6/2012 2:15:00 AM
   of 19
There's an odd thing about the new 1099-B which is the accounting of buy and sale of stocks for the IRS.

The wash sale amounts are included in the total cost basis. And then there is a total wash sale amount. Simple enough, just subtract the total wash sale amount from the total cost basis and have a correct accounting. Next the wash sale amount adds to the basis of the positions not closed out. Of course the positions not closed out are not included on the 1099-B.

The problem is, say that the positions that had the wash sale amount added to their basis were closed out. In that case, the total cost basis includes both the wash sale amounts of the wash positions and the adjusted basis of the latter positions to correct for the wash sale. So, it might be expected that the wash sale amounts shouldn't be subtracted from the total cost basis since they don't ultimately apply. However, since the wash sale wasn't excluded from the total cost basis and the adjustment for the wash sale was included then ... just do the same damn thing as before ... and subtract the total wash sale amount from the total cost basis and have a correct accounting.

Now if you want to do a correct line-by-line Schedule D and D-1 accounting then just subtract the wash sale amount of each position on the 1099-B from the cost basis of each position. Of course the gain/loss is zero for that position. But don't add the wash sale amount to the cost basis of the last position because that's already done !

And there's have another problem. The 1099-B doesn't match to the transaction confirmations or to the account statements but arranges the share numbers and amounts differently. So a month-by-month accounting might be used or might not be used. A least I can use my month-by-month accounting to check the bottom line.

Also, I just took a quick look at the Schedule D for the 1040A and it hasn't changed. The total proceeds are reported just a before and it was always important to match that number on the Schedule D. But now the total cost basis is also reported and the total wash sale is reported. But the wash sale amount doesn't have a column on the Schedule D. So, as I said before, the IRS would have to subtract the total wash sale from the total cost basis to match the total cost basis as filed on the Schedule D. And, I'm saying do match the total proceeds of the 1099-B on the Schedule D but the total cost basis of the Schedule D should match total-cost-basis minus total-wash-sales of the 1099-B.

Next, I took a look a the Schedule D instructions and I don't see anything new there. So the point is the new 1099-B and the new tax reportings.

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From: HIA3/6/2012 2:21:47 AM
   of 19
Oh, if you enter the 1099-B into KBH Investor Accounting and adjust only the wash sale cost basis and that by subtracting the wash sale loss from it, then the Supp App will create a continutation sheet that can be edited and configured for the D-1 . Print it out in landscape orientation.

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From: HIA3/6/2012 4:18:53 PM
   of 19
No, there is a new 1040 Schedule D along with a required Form 8949 .


So the cost basis of a wash sale position is entered as unadjusted on Form 8949. Then there is a column for adjustment to gain/loss where the wash loss goes .

The Form 8949 has a total for sales price, cost basis, and adjustment to gain/loss. It doesn't calculate a line by line gain/loss like a Schedule D-1. And it has a column for a code letter along with the previously mentioned column for adjustment to gain/loss. The letter "W" is used for wash sale lines .

KBH Investor Accounting doesn't currently have a Supp App to make a Form 8949. The Supp App output could be edited to make a letter-code column between security description and purchase date. And then the column of gain/loss could be used instead for adjustments to gain/loss .

KBH Investor Accounting will add a Supp App output similar to a Form 8949 in a few weeks .

For an IRS wash sale accounting, the input into KBH Investor Accounting should be the sales price and cost basis as shown on the 1099-B and then the wash sale adjustment to gain/loss would have to be manually added to the Form 8949 .

The current Supp App is okay for traders-in-securities who use a Form 4797 and who aren't required to follow a wash sale accounting.

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From: HIA3/6/2012 5:20:42 PM
   of 19
Also, as I said before and which was my intended subject, the new IRS wash sale accounting can't be based on an accounting of transaction confirmations or on monthly statements but must be based on the 1099-B .

That's because the new 1099-B doesn't adjust the basis of the wash position but leaves that to the Form 8949 . However, the 1099-B does adjust the basis of the later position to correct for the wash sale adjustment .

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From: HIA3/7/2012 9:15:12 PM
   of 19
I might as well keep going on this Form 8949 subject.

If there are any wash sales listed on the 1099-B then just input the 1099-B into the IRS 8949 pdf that can be saved. The reason for this is that while the wash sale is noted on the 1099-B and then the adjustment performed on the Form 8949, a future correction of the wash sale is not noted on the 1099-B but simply the cost basis is adjusted without note.

(I did send the IRS a comment E-Mail and asked them to change the Form 8949 such that all cost basis adjustments would be performed on the form.)

A couple of techniques to make input into pdf 8949 easier would be copy and paste of dates and input of numbers without commas so that the keyboard number pad can be used.

Then the month-by-month accounting that is based on brokerage statements or on transaction confirmations is only used as a partial checking of the tax accounting.

Now if there are no wash sales on the 1099-B then the user might want a KBH Supp App that would output the month-by-month (or transaction-confirmation-by-transaction-confirmation) accounting in a form similar to 8949 so that the user could make their own forms. And okay, I can add that in a week or two. But if the user does make their own 8949 just note that it has to include the check-boxes.

If the user files with Form 4797 then this new Form 8949 doesn't apply.

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From: HIA3/2/2015 4:01:58 AM
   of 19
Well, there have been so many changes to the Schedule D and Form 8949 that the previous posts on the subject are now out-of-date.

Here's my most recent experience:

Forms 1099 and 8949 .

I'm sure everyone is up to date on the new 1099 and 8949 forms. Well, the very first year of a form 8949 caught me by surprise and I missed the public comment period.

Now this year, I don't see same day wash sales that previously just resulted from selling a total holding with one limit order.

But this year, security transactions that have the basis reported and that don't have adjustments can just be totaled directly on the Schedule D and are not required to be reported on the form 8949. So that makes it double easy ?

Well, here are two notes based on my experience with tax year 2014 1099 composite forms:

An options assignment where the underlying security is called away at the option strike price, has the option premium that was received just added to the security proceeds. So that's easy as well except that there is no note, no code, and no adjustment amount. The whole operation is done for the investor on the 1099 but the investor doesn't know that its been done. But I assume that the (reported) transaction doesn't go on a form 8949 because there is no adjustment amount listed. (There was a "Net Proceeds" note.)

And then a non-dividend-distribution adjusts the basis of a security position. Also, easy, but there is no note, no code, and no adjustment amount. The operation is done for the investor on the 1099 but the investor doesn't know that its been done. And I assume that this (reported) transaction doesn't go on a form 8949 because there is no adjustment amount listed. (There was a footnote that said that a basis might have a return-of-capital adjustment.)

Now certain securities, such as ticker GLD, are not fully reported and therefor must go on a form 8949. And so there may be some investors who have hundreds or thousands of transactions like this.

But this year I used the supplemental application for making a Form 4797 output and I used the output just as a means of checking the Schedule D.


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To: HIA who wrote (17)1/13/2018 1:40:16 PM
From: robert b furman
   of 19
Is there any one here who can give me an update on REIT's and their taxability.

Do REIT's pay tax and then distribute 90% of there profits?

Does the 1031 tax free exchange essentially eliminate them from paying taxes?

I've not seen an update on the new tax changes and Thanks in advance to anyone who has an update on this subject!


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To: robert b furman who wrote (18)1/30/2018 8:40:15 PM
From: HIA
   of 19
This is not really a income tax board except that a personal finance software can help with taxes.

But I am a REIT investor.

A REIT doesn't pay tax and does pay out at least 90% of earnings. A REIT might pay out more than 100% of earnings since there is a difference between earnings and funds-from-operations. The REIT might consider earnings to contain un-necessary charges since, for example, the REIT renovates property that is said to be depreciating. Of course depreciation is a non-cash charge.

Now a REIT dividend is not a qualified dividend but if the REIT gains in value while also paying a dividend then the investor will not mind.

REIT's might be currently risky with interest rates going up.

Well, this can be an activity post and so here is a link to KBH Investor Accounting:


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