• Do I know how to get the correct information into the software?
• What do I do with the output? How do I put it on my tax return?
• Is it correct? What do I tie the amounts to?
• When do I report December option sales?
• What about the closing of positions in January?
• If I trade multiple strategies for a stock or option, how are they reflected on my return?
The two most popular downloadable products are GainsKeeper® and TradeLog™. I have evaluated both with the following comments:
• Free at some broker's websites (optionsXpress, thinkorswim) and at a minimum stock trading level
• Produces a Schedule D-1 that can be filed with your tax return
• No ability to format output, i.e., reporting in whole dollars only
• I used it for my data just to see how it performed ... it was off over $48,000 one year and over $25,000 the next year
• The majority of my clients who have used GainsKeeper also question its accuracy
• Technically accurate and fast if input correctly
• Multiple input formats for multiple brokerages
• Technical support available online or via telephone
• TradeLog cannot handle spin-offs automatically (I haven't found a package that can)
• You need to understand and be good at:
1. downloading data from you broker,
2. capturing it in a particular file format, and
3. transferring it into the software
• If you have carryover, adjusted basis from a prior year, it must be input separately
• The output is a report that is attached to the tax return. Although technically correct, are you sure you completely understand it and if not, as a do-it-yourselfer, would you attach something to your tax return you don't completely understand?
• Here are some samples of TradeLog output including my comments (Note: Two of these examples were generated with a version of TradeLog purchased for 2006 tax returns so the errors and reporting may have been corrected)
• Here are updated samples of a TradeLog Schedule D-1 for 2010 compared to our reports, using the same data
For active traders, more than 1500 transactions, the price is $297, and they suggest upgrading and/or renewing your license each year.