by David N. Eich - originally published June 9, 2005
There are many problems faced by active traders in calculating their capital gains and losses from their online broker’s trade history. Let me start by saying that...
Most brokers do not make it easy for their clients!
There are absolutely no standards for trade history reporting from one
broker to the next. This presents a real challenge for any trader who
wants to analyze his or her trade history.
See our Gathering Trade History from your Online Broker tax topic to see what I mean.
How does one get their trades into some sort of trade analysis software or spreadsheet? How can this be done for several different brokers?
What do they provide?
Some brokers provide simple trade history reports while others provide
very complex statements or reports which have so much HTML formatting
that it makes it virtually impossible for any one to copy and paste the
information into a personal spreadsheet! Few provide a comma or tab
delimited text file or Excel file download, and even these differ
greatly in column formatting.
A few brokers have interfaces to personal finance software programs such as Quicken or MS Money or popular tax software programs such as TurboTax and TaxCut. But these programs were never designed to handle the volumes of trades made by the active trader, and most have serious limitations when it comes to properly matching these to IRS requirements.
And NONE of the above mentioned software programs calculate wash sales which is part of the IRS tax law and required for filing a proper schedule d.
Active traders need to analyze their profits and losses.
Trades must be imported and matched. Profits or losses must be accurately
calculated and adjusted for wash sales. This needs to do be done simply and
regularly if you are to ever get a handle on your trading gains and losses.
This may be the most overlooked problem facing active traders today.
David Eich, Author