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Hi All fools,
I have sheets which meticulously contain schedule 'D' data such as buying, selling, diving large blocks into smaller ones with associated cost basis, wash sales, etc. I have always submitted this data with my income tax returns in the past. I'm wondering should I continue this proceedure now, 2003 and in the future? Please I'd like your feedback on this perplexing question? Thanks fellow and gal fools.
Bob K
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I don't understand what you're talking about. The requirements are that you include, for each sale: a description of what you sold, dates purchased and sold, sale price and basis, and gain/loss. In the case of a sale which contains both short- and long-term elements, you break it up into two pieces and apportion price/basis numbers accordingly. In the case of a wash sale, you typically just say "wash sale" and enter a number in the gain/loss column to cancel out the loss on the line above.

If what you're doing is including a spreadsheet printout that contains all that information in that format, then fine. If you're doing something else, you'll have to explain further. How about an example?

Lorenzo
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Thanks Lorenzo for the help,
I have a separate page for each of the 4 stocks I trade each year. For example XYZ stock had 10 transactions during 2001 and 17 in 2002. 2 trades resulted in wash sales in 2001 which I spell out in a note on the bottom of the XYZ page. I detailed how the replacement shares cost basis(CB) is increased in 2001 so the sale of XYZ in 2002 can be easily reference by the IRS. All buy and sell trades are contained on this separate sheet that are needed in figuring out my income tax. All sales and related buys in 2002 are included on schedule 'D'. The other XYZ sheet is used by me for reference and it this sheet I am referencing to give to the IRS. I hope it clear now. Thanks Bob K
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Fine. It sounds like you're what you're doing is sending them a Schedule D (and continuation sheets D-1), all properly filled out. And in addition, you're sending them backup data to support your numbers.

My inclination is NOT to do that - just send 'em what they ask for. Of course, you would keep all those calculations, confirmations, and statements in reserve, in the event something is questioned. If you have a wash sale, for example, and properly cancel out the loss on Sched D, that's all the IRS wants to see. I don't think it's necessary (or desireable, even) to explain in a footnote to a succeeding sale that the basis is increased due to the earlier wash sale. The last thing you want to do is to confuse the IRS folks, and get them to scratching their heads at your return...

Lorenzo

(Ok, this runs somewhat counter to my usual advice, which is to attach a continuation sheet and explanation when something looks a little odd. I do that often with my non-cash contributions - but that's because Form 8283 is excessively lame. Sched D is pretty straightforward, and I think 99.9% of the Sched D entries are routine.)
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