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I received a form this year from Freetrade noting my stock sales. So when reading back into my statements to find the cost basis of these sales, I happened upon a short-term trade (for a loss) I had back in 2002. Back then, Datek never sent me a form like Freetrade has indicating my sale, so I never included it on my 2002 return.

Does this mean I should file an amended return for 2002, or can I carry the loss forward to this year and use it? TIA for advice.


I'm sure Datek sent a 1099-B for your stock sale. I'm somewhat surprised you haven't heard from the IRS yet (computer match notices are usually issued about 12-18 months after the filing date). You should amend your 2002 return to take advantage of the loss, as the IRS will expect you to pay tax on the full sale proceeds until you document that the gain (or loss) was something other than the sale price.

You cannot carry the loss forward until you report it on the correct original year's return.

Ira
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