Capitol Gains and Loss Confusion

[ned4spd8874]

Capital Gains and Loss Confusion

What is the name of your state (only U.S. law)? MI

I'm sure there is a simple explanation and I'm sure I missed it somewhere out here on the Internets. But if someone can please explain this, I sure would appreciate it!

I do some very basic trading on Scottrade. I'm not very good at it; and so far have not made any money, just lost.

My question/problem is this. How can I purchase a stock for say $500, sell it for $200 later and have to report it as a $200 gain!?!? It should be a $300 loss, shouldn't it???

I use TurboTax, so maybe it's a quirk in their system. But it got it's information from Scottrade electronically.

I don't know. I just don't get it. I didn't make any gains whatsoever and I still have to report gains???? Makes no sense to me.

 

[anteater]

Unless you are talking about Ann Arbor, it is capital gains and losses.

What you need is to enter your cost basis in Column e on Schedule D. I don't know TurboTax, but I'm certain that the "Help" will tell you how to do that.

I do some very basic trading on Scottrade. I'm not very good at it; and so far have not made any money, just lost.

Don't worry. Most people don't and never will. If you ever do, you will be beating the probabilities.

 

[ned4spd8874]

Unless you are talking about Ann Arbor, it is capital gains and losses.

What you need is to enter your cost basis in Column e on Schedule D. I don't know TurboTax, but I'm certain that the "Help" will tell you how to do that.


Don't worry. Most people don't and never will. If you ever do, you will be beating the probabilities.

Thanks for the reply...and the typo correction. ;o)

What TurboTax puts in Column E is $7, which is their fee for selling the stock. But then that makes me wonder why it didn't put in the $7 fee when I bought it then?

But basically what you are saying is that if I buy a stock for 500 and sell it for 200; it should be as follows. Column D would be 200, Column E would be 500 and then Column F would be -300? If that's true then TurboTax is trying to screw me.

 

[tranquility]

I assure you Turbo Tax handles this situation just fine. I suggest operator error. Also, don't just rely on automatic input. It hardly ever works.

I'd say your loss is $307 because you add in the costs of buying and selling to to basis.

 

[ned4spd8874]

I assure you Turbo Tax handles this situation just fine. I suggest operator error. Also, don't just rely on automatic input. It hardly ever works.

I'd say your loss is $307 because you add in the costs of buying and selling to to basis.

Okay, thanks for the info. This is my first time doing my taxes and having to factor in stock purchases and selling.

Now the problem I would have now is I just realized it...and I've already submitted my returns! I will know for next year, but I guess it would be too late to do anything about it now, but would I be able to claim it next year then? I know TurboTax always asks if there is anything I need to file as a change or something like that from a previous year.

 

[anteater]

No, you can't claim it next year. You need to file an amended return.

 

[ned4spd8874]

No, you can't claim it next year. You need to file an amended return.

Crap! I'll have to see if the return difference would be worth it or not. I do know that I lost around $1000. Not a TON, but not chump change either.

If I do decided to do that, would I have to do that ASAP, or what is the time limit on that? Never had to do that before.

 

[LdiJ]

Crap! I'll have to see if the return difference would be worth it or not. I do know that I lost around $1000. Not a TON, but not chump change either.

If I do decided to do that, would I have to do that ASAP, or what is the time limit on that? Never had to do that before.

It would be best to do it promptly.

If your loss was 1000.00 and it reported it as a gain rather than a loss, then the overstatement of income on your return would be 2000.00. If you are in the 15% marginal tax bracket that represents 300.00 that you would get back. If you are in the 25% marginal tax bracket, that represents 500.00.

Amended returns are a bit of a pain to do properly. You might want to consider using a tax professional. Generally the charges for amended returns are not high.

 

[ned4spd8874]

It would be best to do it promptly.

If your loss was 1000.00 and it reported it as a gain rather than a loss, then the overstatement of income on your return would be 2000.00. If you are in the 15% marginal tax bracket that represents 300.00 that you would get back. If you are in the 25% marginal tax bracket, that represents 500.00.

Amended returns are a bit of a pain to do properly. You might want to consider using a tax professional. Generally the charges for amended returns are not high.

Thanks a lot for all your help guys!!! I really appreciate it!