How the wash sale rule works with Simply Track

Wash Sale

A Wash Sale occurs if you sell stock at a loss, and buy substantially identical securities with in 30 days before or after the sale.

Simply Track is a wash sales / schedule d program that calculates wash sales between what the IRS refers to as "substantially identical" stock or securities. So if you trade options, or stocks and options on the same underlying stock or security and incur losses, you may have a wash sale problem.

According to the IRS you should report all wash sales as well, meaning those transactions where you buy substantially identical securities within 30 days before or 30 days after the sale. Losses resulting from wash sale transactions may not immediately be claimed for tax purposes. The one good thing about wash sales is that you may get to claim the loss in a later tax year if you do not have substantial gains. The disallowed amount is always added to the cost of the repurchased stock, so the wash sale loss can be claimed when the security is later sold.

Simply Track generates wash sale reports with a click of the mouse to make sure you get the correct tax credit allowed from wash sale adjustments. For the sample trades discussed in previous post you get the following report obviating some really complex computations:

How trade matching works

Trade Matching

Trade Matching is nightmare for unequal number of shares, especially if an active trader trades same stock repeatedly

Example

Let us assume an active trader made the following trades Buys 500 shares of ABC Corp. for $20 per share on 03/12

Sells 234 shares of ABC Corp for $18 per share on 03/14

Buys 300 shares of ABC Corp for $16 per share on 03/15

Sells 66 Shares of ABC Corp for $19 per share on 03/16

Sells 250 Shares of ABC Corp for $22 per share on 03/19

Sells 150 Shares of ABC Corp for $20 per share on 03/19

Buys 200 shares of ABC Corp for $18 per share on 03/21

Sells 300 Shares of ABC Corp for $22 per share on 03/22



Based on the above transactions can you tell which sell orders correspond to which buy orders? What if you have 1000 such transactions? According to the IRS, in most circumstances you should use First In First Out (FIFO) order matching. In the above example FIFO requires matching Trades 2, 4 and 5 with Trade 1. The remainder (50 shares) of Trade 5 is then applied to Trade 3 along with all of Trade 6 and 100 shares of Trade 8. Not so easy!

Moreover, most Brokerage firms don't even provide stock purchase transaction information when they send Form 1099, consequently forcing you to use your trade history to figure out the cost basis for each trade. Do you have time to do all these mappings and compute the cost basis for each trade? With Simply Track you can do it with a click of the mouse.

New Version of Simply Track is released

Product highlights:

• Simply Track 3.0 is completely rewritten to overcome short falls of ST 2.0. This new Simply Track runs extremely fast compare to older versions.
• Accurately calculates wash sales.
• Supports many online brokers. Most cases it is a direct import from your broker account. No need for reformatting your trade history.
• Handles an unlimited number of transactions (unlike other stock tracking programs).
• Adjusts your stock splits automatically so that you don't need to do this by hand.
• Automatically does FIFO trade matching to satisfy IRS wash sale requirements
• Automatically creates a Schedule D-1 attachment and prints this IRS form for submitting along with your other Federal forms.

Please download and install the product from this link

http://www.vbssol.com/cgi-bin/download.pl?file=22

Download product manual

http://www.vbssol.com/Simply_Track_Manual.pdf

Also make sure you watch Simply Track demo from here

http://www.vbssol.com/st_new_demo1106.swf.html

About Simply Track

Simply Track , is an easy-to-use stand alone application that simplifies stock portfolio tracking and IRS Schedule D1 generation. If you are an active trader then you landed into right place and you need Simply Track for your tax reporting and portfolio analysis. Product is plain, simple, feature packed award winning software.

1. With Simply Track you can import all your trades from various brokerage accounts and generate your Schedule D with a click of the mouse. Don't spend hours doing wash sale calculations for your capital gains tax forms, Simply Track will do it all for you. You can even export your Schedule D into .TXF format for importing into any tax software program that accepts TXF files such as TurboTax™ and TaxCut™

2. You can simply track your stock or mutual fund positions in multiple portfolios, even with various online brokers. Using Simply Track you can bring all account data together for monitoring multiple portfolios and watch lists with up to 30 different parameters, including buy & sell, gains & losses, net gain & wash sales as well as total portfolio values for both long and short positions. Note that the IRS requires (and Simply Track reports!) all wash sales including those inadvertently accrued across portfolios. You can also generate reports like individual Stock Gain/Loss, Asset Allocation, Sector Allocations and much more.