Industry focus
Trader and Stock Option Tax Accounting
Day traders, swing traders, options specialists, and retail investors: we handle Section 475 mark-to-market elections, Section 1256 reporting, wash sale traps, and estimated taxes before the IRS comes knocking.
How we work with this industry
Equity compensation and active trading both produce returns where the reporting is the hard part. Broker statements do not always reflect the correct basis for shares acquired through a plan, and an election that had to be made within a short window either was or was not made. We reconcile the basis, report the activity correctly, and flag the deadlines that do not extend.
Active trading adds a second problem: volume. A year of trades reaches the return through Form 8949 and Schedule D, and the broker's Form 1099-B is a starting point rather than an answer. Wash sales are tracked per account, so a position repurchased at a second broker or inside a retirement account is not adjusted for you. We consolidate the accounts, apply the adjustments across all of them, and reconcile the total back to the proceeds the IRS already has.
Timing is the part that cannot be repaired later. The mark-to-market election under Section 475 runs on its own schedule, well ahead of the return it affects, and it cannot be adopted after the fact once a year turns out badly. Some contracts, index options and futures among them, fall under Section 1256 and carry their own treatment, which is not the treatment ordinary options on a single stock receive. Trading income arrives with no withholding, so a strong year quietly becomes an estimated tax problem. We raise all of this while there is still room to act.
What We Do
What We Handle for Traders and Option Holders
The reporting work behind an active brokerage year, done from the account records rather than from the summary page.
Broker Statement Reconciliation
Every account tied through Form 8949 to Schedule D, with proceeds matched to what the brokers reported, so the totals agree before anything is filed.
Wash Sale Adjustments Across Accounts
Brokers track wash sales inside a single account. The rule follows you, so we apply it across every account you hold, including repurchases made in a retirement account.
Equity Compensation Basis
Shares from options, restricted stock, and purchase plans, worked from the plan documents and the Form 3921 or Form 3922 you receive, so income already taxed on your W-2 lands in basis instead of being taxed twice.
Trader Status and the Section 475 Election
Whether the activity rises to a trade or business, what that would actually change, and where the mark-to-market election fits, reviewed while the timing is still open.
Estimated Tax Through the Year
Trading gains arrive without withholding. We look at the position during the year and set the payments, so a good year does not end as a balance due with an underpayment penalty attached.
Trading Entity Books and Returns
If you trade through an LLC or a corporation, we keep the books, file the entity return, and produce the K-1 that has to agree with what lands on your personal return.
Common Problems
Where Trader Returns Go Wrong
Four failures that show up every filing season, each one cheaper to prevent than to amend.
Filing the Broker Summary As Is
A Form 1099-B reports what the broker knows, not what is true. Shares from a plan, transferred positions, and older lots regularly arrive with basis missing or wrong.
Wash Sales Split Across Brokers
Sell at a loss in one account, buy the same position in another, and neither broker adjusts anything. The loss is still disallowed, and the return is the only place it gets caught.
Paying Tax Twice on Plan Shares
The spread or discount already taxed through payroll belongs in your basis. Left out, the same income is reported a second time, and the overpayment is yours to notice.
A Strong Year With Nothing Paid In
Gains do not withhold. A year that goes well with no estimated payments behind it produces a balance due and a penalty that no deduction repairs afterward.
Services we offer in this industry
The services most often used by businesses in this industry. Each one is led by an Enrolled Agent.
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Common questions
Questions we hear in this industry
Straight answers, from an Enrolled Agent.
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