A new one for me... puts - how to enter?

[Kea]

I agree Lion - this process is very confusing. I just asked my client if they used marked to market or made any of the other elections. While for a lot of stock sales, the client has no idea what I'm talking about - "It just whatever my broker did?", when it comes to Straddles, the client usually knows the terminology better than I do. So, I've felt comfortable taking their answers for the elections.

There is usually a line on the 1099B that mentions the 12/31 aspect. I've seen it, but it's been $0 on the few that I've done. I really spun my head around in circles last year with these, but they ended up to be pretty simple when I finally worked through it. I hope that doesn't mean I totally botched it. If I remember correctly, I ended up just putting the broker name & the net loss on the form & everything else flowed through. Client had not made any elections.

[Lion EA]

Thanx so much for telling me your experiences. I did these years ago at Block, but have no access to those old returns. I did pull out my textbook. I also have been trying out things in my software. If I use Part I to enter just a lump sum (over all it was a loss, though some gains and some losses on the individual transactions on the 1099B) then the software does its 40%/60% thing, but Part I is 1256 Contracts Marked to Market. I'll ask my client if he Marked to Market. Considering he didn't know he bought two PTPs in 2011 and sold them in 2012, I'm not sure he'll know about Mark to Market. And, is his Broad Based Index Options what this Form calls Section 1256 Contracts?

And, to really keep me guessing, tech support told me to use this Form sections 2, 3, and 4 -- which threw me for a loop until I realized the input screens are numbered that way and not the form itself which stops at 3. However, it's section 1 that does the 40/60 thing, and she told me to start with 2...

[Kea]

I'm not sure I was much help - I don't consider myself an expert. I've managed to wiggle through a couple of these. But it was last year during the summer. My memories from then are kinda foggy right now. I pulled up the "big" return I remember working on last year & it has 3 entries for the 6781. If I remember correctly there was one company where both the husband and wife had accounts and a 2nd account for the husband. It seems like the 1099B usually just had the one total at the bottom. But there is something tickling the back of my brain that included a long list of individual sales. But I have several spreadsheets from him for all the stocks, puts, calls, etc. that he sold. I'd have to look through all the files to see if I can find what went where. (BTW, this guy had hundreds of thousands in sales & purchases (yes, probably the same money over & over again), but had retired from his job early in the year so qualified for EIC! He had very minor interest and no dividends in all that investing. Just thousands of $ in losses to show for it.)

I have a client that finally sold all their PTPs last year. That return is on extension for other reasons. I haven't done a selling of PTPs yet. Would you mind if I picked your brain this summer if I have questions?

[Lion EA]

I had my first PTP sale last year. I remember there was info with the K-1 that changed the basis reported by the 1099-B before you enter on D/8949.

I'd promised this guy his return by Tuesday. But, there's just too much data entry left. And, I need to figure out the PTP sales that I've done only once before as well as the puts. When he gets back to me re the questions I emailed him late Friday night, I'll email him extensions to send in with money and tell him I cannot complete his returns due to learning about his PTPs and other investments this late in the season. He's not going to be happy. But, I already had gone online to get his property taxes. I'm not his personal valet. He won't get anybody else to do all this work for him without a bigger price tag.

Thanx for your help, Kea. When the season's over and you catch your breath, let me know what you learn from your trader's prior return. And, if I can answer any questions, fire away.

[Kea]

Thanks Lion. I really appreciate it. I'll go back through and find those answers for you. I really don't remember doing the data entry for the Straddles. And I had just learned how to inport the spreadsheets for his 8949. So for as much time as I spent on it, there really wasn't much billable time. Just a learning experience for me.

[SueC]

Lion -

In Prosystemfx, use input Form D-8. As a description enter something like "Broker xyz account" in box 40, put the total losses in box 41, the total gains in box 42, and the program will enter them on Form 6781, Part I and calculate the 60/40 split. These are index options, which are treated as Section 1256 contracts, as opposed to writing a put or call on a specific stock. Those are the ones that get listed on Schedule D individually. I have never attached anything to mine and have not had questions, but now I suppose I should look at what should be attached.

[Lion EA]

Wow, that is great. Thank you very much, Sue, and everybody, for chipping in on this. Hate new things in April when I can barely do the old things! Couldn't do this alone.