MONDAY, DECEMBER 10, 2007
2008 Investment Guide
Basis Trackers
By ASHLEA EBELING
Tradelog
(www.armencomp.com/tradelog) This service caters to folks who do thousands of trades in a year--or don't
want to keep their personal holdings online. You download the software, keep track of your trades on your
own computer, and then download basis updates. Tradelog has the most sophisticated system for tracking
and reporting wash sales and a free help line. Pricing ranges from $69 a year for 200 lots to $297 for
an unlimited number.
See the complete article at Forbes.com.
MONDAY, FEBRUARY 12, 2007
ELECTRONIC INVESTOR
Tax Software for Serious Investors
By THERESA W. CAREY
FREQUENT TRADERS WHO DO THEIR OWN taxes are either control freaks (my category) or very comfortable with the ins and outs of tax accounting. Crazy is another possibility. In any case, do-it-yourselfers of all types need tax software -- either packaged or online.
Any tax program should be able to deal with income and deductions, but the serious investor needs to compile an accurate Schedule D, covering all transactions. There's no shortage of software alternatives. Sorting through them -- particularly the jumble you see in stores -- is the problem.
One solution for traders with reams of taxable transactions is TradeLog published by Armen Computing. We like TradeLog for active stock and options traders. It does a much better job of tracking options transactions than Quicken or Money, and it's a good tool for short-sellers. TradeLog can also help you track futures transactions, which aren't specifically addressed in other programs.
TradeLog offers five versions, keyed to transaction volume. TradeLog 200, which covers up to 200 trades, is $69. The top-of-the-line GTT TradeLog, which handles unlimited transactions and is aimed at those needing mark-to-market accounting, is $349. GTT TradeLog is also supported by Green Trader Tax (www.greentradertax.com), which provides tax advice for frequent traders.
See the complete article at The Wall Street Journal.
MONDAY, FEBRUARY 13, 2006
ELECTRONIC INVESTOR
Computing Your Taxes
By THERESA W. CAREY and KATHY YAKAL
TAX-PREPARATION SEASON OUGHT TO BEGIN with a basic question: Should you do it yourself or hire the job out? If you feel that you're educated enough on the ins and outs of filing your own return, with all the complications your life presents tax-wise, then pick up a copy of a tax-preparation program to help you out.
Filing a full 1040 long form by hand by yourself could qualify as proof of insanity, especially if you've done any substantial trading last year. Entering data on transactions -- including dates, cost bases, sales prices -- plus dividends and interest and then making the appropriate calculations by hand isn't complicated, but it is extraordinarily and unnecessarily tedious. Plus, it all but invites errors on your returns.
If you have a relatively straightforward tax situation -- salary, the typical deductions for mortgage interest and state and local taxes, plus simple investment returns -- tax-software Websites should be able to handle your return without much complication. The program will ask you relevant questions; you fill in the answers as you go along. The interview process should cover most of the usual tax questions, and make suggestions along the way.
EXCERPT:
FOR THE PERIPATETIC TRADER, neither TurboTax nor TaxCut will make the job of preparing your Schedule D easy, though. That's where TradeLog and GTT TradeLog come in handy (www.armencomp.com). These programs, published by Armen Computing, help those who actively trade to generate portfolio-performance reports as well as prepare a Schedule D.
GTT TradeLog is aimed at traders who need to track mark-to-market transactions. TradeLog is for all the other active traders. Prices range from $49 for a version that is restricted to 100 transactions, to $349 for the mark-to-market version.
The programs produce a file in TXF format that can be imported into TurboTax or TaxCut for preparing your entire return. We found that TurboTax handled the larger number of transactions more elegantly and with fewer errors.
MONDAY, DECEMBER 20, 2004
ELECTRONIC INVESTOR
By THERESA W. CAREY, KATHY YAKAL
'Tis the Season
EXCERPT:If you trade in such volumes that you're overwhelming Quicken with your transactions, take a look at TradeLog. It properly matches your trades, including short sales, and it calculates your gains and losses, including wash-sale adjustments. It then generates your Schedule D Capital Gains and Losses report. There's a version for mark-to-market traders, GTT TradeLog, as well as various versions with restricted numbers of transactions. GTT TradeLog can generate Form 4797, a task not easily accomplished by the mainstream tax-preparation programs.
In addition, if you are buying a stock that you sold recently for a loss, you should make certain that you're not falling into the wash-sale trap. A wash sale will happen when an investor sells shares of a security at a loss, and then buys that same security, or one that is considered substantially identical, within 30 days. To further complicate this rule, the security could be purchased 30 days before or after the sale for a loss, effectively creating a 61-day window.
When a wash sale is triggered, your loss is deferred and the cost basis of the new lot is increased to reflect the deferred amount. This will delay -- or possibly deny -- your ability to take a loss on your tax return. To avoid triggering a wash sale on a security sold for a loss, you can buy a stock from the same sector, say one drug company for another, or perhaps an exchange-traded fund that covers the pharmaceutical industry. In the case of mutual funds, you can buy a different fund with a similar investment objective. Online stock and mutual-fund selection tools are a huge help comparing and analyzing alternative investments.
MONDAY, JANUARY 19, 2004
ELECTRONIC INVESTOR
By THERESA W. CAREY
Greater Tool Theory
Trade-Ideas flags gaining stocks, while GTT TradeLog keeps track of your gainsEdited by Randall W. Forsyth
Speaking of tools for peripatetic traders, tax season is coming up. We'll look at tax software and online tax-prep sites in a future column, but in the meantime, what can you do if you want to keep track of your stock, futures, options, and currency trades? Try the updated version of GTT TradeLog, a program that helps active traders calculate profits and losses, and prepare tax returns. And mark-to-market traders can relax -- GTT TradeLog can generate Form 4797 for you, which is a task not easily accomplished by the mainstream tax-preparation programs.
TradeLog can close out the tax year and help you match your trades to your broker's 1099. The program establishes a data file for each trading year and each broker, and you can sort transactions on a variety of criteria: ticker symbol, date range, or tax lot. You can even sort trades on whether they're long or short, open or closed. Traders who don't qualify for mark-to-market status can use GTT TradeLog to track wash sales.
New in Version 4, which was recently released, is the ability to resize the TradeLog window and sort the columns. The publisher added a series of online tutorials which describe how the various functions work -- a very helpful improvement over the prior version, which presented you with a blank screen and very little advice on how to make it work.
The program itself has the look of a spreadsheet, so some of the functions are intuitively obvious -- adding a row for new data, for instance. One very welcome addition to this version is the use of alternating colors for the sets of transactions pertaining to a particular stock or option; you can track the progress of your buys and sells up until the time you close out a position. The program shows a summary of your open positions, with your unrealized gains and losses; you can update the prices with a button click.
Additional enhancements include the ability to isolate long- and short-term trades, plus tracking gains and losses from currency trades. You can generate your Schedule D for stocks, options and single-stock futures trades, or the IRS Form 6781 for futures trades.
Although adding transactions manually is easy in TradeLog, frequent traders will find it much more convenient to import transactions from over 30 online brokers, including Interactive Brokers, Ameritrade, BrownCo, E*Trade, Harrisdirect, Schwab, Scottrade, Terra Nova and Tradestation. GTT TradeLog doesn't import the data directly from the broker's Website, but it creates an import filter, found on the Options menu. From your broker's site, you generate a transaction file and save it to your computer, then use the import filter for your broker. The transactions are then read into TradeLog, and you can manipulate them as you please.
You can export transactions to a text file, an Excel file, or an Adobe Acrobat report. The publisher has changed the pricing structure significantly: You can purchase an unrestricted license for $349; or, cheaper versions are available for processing fewer transactions. You can test out a fully functional copy for free, but it's restricted to only 20 transactions.
DECEMBER 22, 2002
A Stocking Full of Nuggets
By ALAN FARLEY
Page 2
Or Maybe Not
If you don't know about the wash/sale rule, you'd better find out in a hurry. This obscure tax code drives traders crazy and gives tax advisers a lot of new customers. The bottom line on the rule: Don't carry a stock into the new year after you've traded it during the old year.
Investorwords.com defines the wash/sale rule as follows: "IRS rule prohibiting a taxpayer from claiming a loss on the sale of an investment if that same investment was purchased within 30 days before or after the sale date." The rule is meant to discourage investors from selling at a loss just to get the tax benefit.
Now you're really confused, aren't you?
This is a case where the definition is more confusing than the concept. It's also a case where I can't help you, because I'm not a tax adviser. Whatever you do, make sure to seek counsel from someone who understands the unique issues facing short-term traders. Many financial advisers misinterpret how the rule applies to short-term trading, and their mistakes will cost you a lot of money.
Let the Software Fix It
Speaking of taxes, how can you organize all those short-term trades into a clean IRS format, without staying up nights writing Excel macros? My favorite solution is TradeLog, a pricey yet powerful software that will automatically dump your broker statements into multiple reporting formats, including IRS Schedule D. TradeLog adjusts easily to mark-to-market traders, as well as part-time hobbyists. Oh, did I mention this outstanding product also calculates wash sales?