My Favorite Tax Reform
August 7th, 2006 by BWV
Before discovering TradeLog software, I used to match trades manually using Excel. My Schedule D was an annual nightmare. As I toiled into the night during early April, I always wondered why virtually no brokerages provide actual tax lot accounting for their clients. They made the trade.. they have the necessary information.. and they have no excuse.
Compare this shortcoming with another source of tax payments:
- Your employer reports your wages to the IRS on a W-2. Employers are required to comply. Straightforward. Your tax return better match up, or you get an unwelcome phone call.
- Brokerage firms only report “Total Sales Proceeds” on the 1099 that both you and the IRS receive — not actual gains & losses. They leave those calculations to you, and predictably people tend to get it wrong either by honest mistake or by understating gains.
Presumably prompted by deficits, Uncle Sam has woken up & realized he’s beeen getting ripped off — the “tax gap” is estimated in the hundreds of billions annually. Washington is finally mulling a change (Click here for the story).
Voila.. one government proposal that actually makes sense!
Buckner,
I’ve asked the good old boys at Geronimo the exact same question, and (for the lack of better answer) they claim that we are not in the tax advisory business and then try to quote some securities act from ages ago. Probably bullshit…
Randall