Accounting for securities is complex with cost-basis reporting and wash sale adjustments. Otherwise, accounting is fairly easy for traders with futures, forex and expenses.

Accounting Service For Traders

Accounting for trading gains and losses is the responsibility of securities traders; they must report each securities trade and related wash-sale loss adjustments on IRS Form 8949 in compliance with Section 1091, which then feeds into Schedule D (capital gains and losses).

Broker-issued securities Form 1099-Bs provide cost-basis reporting information, but they don’t provide taxpayers everything they need for tax reporting if the taxpayer has multiple trading accounts or trades equities and equity options. Brokers calculate wash sales based on identical positions (an exact symbol only) per separate brokerage account. But Section 1091 requires taxpayers to calculate wash sales based on substantially identical positions (between equities and equity options and equity options at different exercise dates) across all their accounts including IRAs — even Roth IRAs. The best accounting solution for generating a correct and compliant Form 8949 is software that’s compliant with Section 1091. Don’t just rely on a Form 1099-B (exception: if there is only one brokerage account, the trading is only in equities, not equity options and there are no cost-basis adjustments including wash sale losses). Many tax preparers and taxpayers continue to disregard Section 1091 rules, even after acknowledging differences with broker 1099-B rules. They do so at their peril if caught by the IRS.

When you consider a securities trade accounting software and Web-based solution, ask the vendor if they calculate wash sales based on Section 1091 and if not, you may want to skip that solution. TurboTax ads say they make taxes simple, and they imply you can just import your 1099-B. You’ll spend a lot of time finding their small fine print about having to make Section 1091 adjustments on your own. Some brokers offer a professional trade accounting software, but it makes wash sale loss adjustments on identical positions, which is non-compliant.

We offer a full professional accounting service
We download your securities trades into software and generate Form 8949 and or Form 4797 in a manner that is compliant with Section 1091 wash sale rules for taxpayers. We also prepare Form 6781 for Section 1256 contracts and prepare the necessary tax forms for reporting forex transactions. You can give these tax forms to your tax preparer or our CPAs for our tax compliance service.

Administration Fee: We charge an administration fee of $75 per taxpayer (individual vs. entity), per year, for professional usage of Tradelog software. We’ll waive our administration fee for clients with a current retail license to Tradelog.

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Accounting Service General Ledger

Entities require a balance sheet and profit and loss statement. That means debits and credits and reconciling accounting to bank statements.

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If you have any questions about our accounting services please contact us.

We look forward to working with you soon.

Managing Members Robert A. Green, CPA and Darren L. Neuschwander, CPA