I am a day trader. How, exactly, do I report my investment income ($50,000 in losses, actually) into TurboTax, so that I can capitalize on the full range of deductions?

[k-man]

my securities gains are not a loss.  i have 10k of gains and 3k of expenses.  i would like to pay tax on 7k.  but if i record the gains on schedule D and the expenses on schedule C, i end up paying taxes on 10k of gains since the 3k of losses do not get applied against the gains.  that is my issue.

[bwa]

Try printing the return - if the expenses from the Schedule C show up as a loss on page 1, you are getting their benefit.

[cboizauer]

I am having the same issue.  I know what needs to be done.  I need to fill out schedule D then on line 17 subtract (or add if loss) the amount that I earned to zero out Schedule D.  Then move the zero'd out number to Schedule C so I can write off the expenses.  TurboTax online does not let you do this as you cannot access forms mode.  Forms mode is available on the CD.  So you can manipulate it there.  Then the issue becomes that Day traders do not pay Self Employment tax.  How do I deduct that from the Schedule C?  Help?

[k-man]

i found that article as well suggesting that technique but i dont think it's actually correct.  i think if you did not make MTM election then profits or losses must go on schedule D.  as per IRS.....

The Mark-to-Market Election
Traders can choose to use the mark-to-market rules, investors can't. If a trader doesn't make a valid mark-to-market election under section 475(f), then he or she must treat the gains and losses from sales of securities as capital gains and losses and report the sales on Form 1040, Schedule D (PDF).

[cboizauer]

If you qualify as a trader, you have the option go to mark to market accounting but you are not forced.  As a cash basis trader, you must report trades in a schedule D/8949 and transferred over to Schedule C.

[cboizauer]

This online software is not set up to do this.  I ordered the CD where I can supposedly go to the forms once they are filled out and manually change them.  Will receive it in 5 days

[k-man]

thats only true if you selected MTM by april 2015.  hopefully you did that.  btw you can also just download instead of CD to get to forms mode.

[fanfare]

[removed]

[kiran]

I have the same issue - I have trading income reported on Schedule D (> expenses), but the Business section of TurboTax Windows won't let me report Home Office Expenses because the Business section shows a loss (since income is 0).  How do i transfer the Schedule D income to Schedule C and Business section, so TT-Windows let's me enter and deduct Home Office expenses

[bwa]

your answers not really answering to my questions above.  Simply put, can I expense subscriptions, equipment and etc on Schedule C even if I don't elect M2

See this part of my post above:  With day trading your gains and losses still go on Schedule D but your business expenses such as margin interest, computer costs allocatable to the business, etc. go on Schedule C.  In effect your losses will be on Schedule D (limited to $3,000 like everyone else) but your day trading expenses will go on Schedule C (unlike others classified as investors.)

The underlined portions would include subscriptions and equipment depreciation.

[shunchang]

Hi again bwa and thanks for fast feedback!  ok with gains and losses on Schedule D.  Since I don't have a business entity, I can still expense and deduct equipment and etc on Schedule C?  Also, If I do elect M2M for 2016, can the losses from prior years including last year to be fully carryover for 2016 (if I am profitable in 2016.  And, by how much can I carryover/deduct?)  
Thanks again!

[bwa]

Your note that "Since I don't have a business entity . . . " is not quite correct.  You do - it's a sole proprietorship engaged in day trading.

If you elect M2M for 2016 it only applies to those losses forward.  Prior year losses are still capital losses and limited to $3,000 / year."

[shunchang]

bwa, I haven't registered sole proprietorship...I don't have a fiticious business name.  extensive day trading on daily basis automatically puts me in as sole proprietorship?

What can I do to write off carry over capital losses completely?  At first, I thought M2M election will take care of it.

Assuming M2M election is done for 2016 year, can I write off 2015 day trading losses?  If I end up with capital losses again this year, in 2017, can I fully write off 2016 capital losses in day trading?  

Thanks again!

[shunchang]

bwa, another questions...

If 1099 b short term sales (stock/equities) with cost basis reported to the IRS, Box A all filled in, do I still need to finish reporting of these sales by mailing instructions to IRS?

For 1099 B, I only have gross proceeds and cost basis reported to IRS.  Do I really need Net proceeds?  If not, what about the commissions and fees for all trades?

Thanks
Shun

[shunchang]

Another questions... When entering Gross Proceeds in Box A of 1099 B, TurboTax says number is too large for this field.  I checked TurboTax prior Q&A and one of answers was to split up proceeds into small sizes with number smaller than $8,999,999.  For example, if my proceeds and cost basis are $50,000,000 for 2015, I will need to split into 6 x $8,000,000 + $2,000,000 = $50,000,000.00.  Is that really ok?  

Thanks
Shun