What if you don't file your online trading tax?

Hi guys, here is my silly question:

do you have to file your online trading account related tax if you only trade once a year and losing money ?

I know i must report all taxes by law but my scottrade still hasn't sent me the tax letter. I was just wondering if it's a big deal if i just dont include them.

thanks for help

Public Comments

1. Scottrade has until 2/16 to mail the 1099-B (new deadline this year) and the IRS won't consider it late until after 3/2.

Just wait.

And yes, it is a big deal if your trades make you look like you made enough money to owe tax (the IRS doesn't have your cost basis, so they use $0).

2. Yup! Even if you traded at a loss.

The problem is that the IRS only knows about the net sales amount. You could sell $1 million worth of stocks that you paid $1,001,000 for and have a $1,000 loss but as far as the IRS was concerned, you'd have a taxable gain of $1 million if you failed to list the trade on Schedule D. The IRS would think that you owed up to $350,000 in taxes on that and you can bet that they'd pursue that with a vengeance!

3. Yes, it is a big deal, ESPECIALLY if you lost money. If you do not file the paperwork, then the IRS assumes that everything you sold had been purchased for $0.00 and that the amount for which you sold it was 100% pure profit, and taxes you on that amount.

On the other hand, if you properly report the loss, up to $3000 can be deducted from your other income.

4. You need to put your cost basis and sale price on Schedule D for anything you sold in 2008 (unless it is in an IRA). If Scottrade already factored trade fees into that it is simple. If they just report gross sale price without trade fees figured in, you would add both the buy and sell fees to the gross "buy" price.

It is possible that your tax forms are on-line at Scottrade. If you fail to file Schedule D with your taxes, the IRS may think that your entire sale price was profit and you will receive a personal letter advising you what they think you owe, instead of what you actually owe, or credit for your loss.