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Entering day-trader transactions per IRS Publication 550 in Lacerte
by Intuit•5• Updated 5 months ago
Input the following required information in the following fields on Screen 17.1, Dispositions (Schedule D, 4797, etc.):
- Navigate to the section Dispositions (Schedule D, 4797, etc)
- Enter Description of Property (Code 800)
- Enter Date acquired (negative date - various) (Code 25)
- Enter Date Sold (negative - various) (Code 26)
- Enter '1' in the field 1= short term, 2= long term (O) (Code 51)
- Check the box- Securities trader transactions (Code 48)
- Enter the Sales Price (Code 27)
- Enter Cost or other Basis (Do not reduce by Deprecation) (Code 29)
- If you only have the loss amount enter it in Cost or basis and do not enter a Sales Price
- If you only have the gain amount enter it in the Sales Price and do not enter a Cost or basis
- Scroll down to the Form 4797 section.
- Enter '-1' in the field Deprecation allowed (-1 if none, triggers 4797) (Code 30)
Per IRS Publication 550, a Mark-to-market election for traders must be made also:
- Navigate to Screen 46, Elections
- In the Elections section, click on the Misc. Elections box.
- Scroll to the bottom of the screen and check the box Mark-to-Market election for traders [475(f)] (Code 12)
- Enter the trade or business in the field Trade or business for which election is made (Code 13)
To record the day trader income as Self-employment income without doubling up SE income on the Schedule C:
- Navigate to Screen 45.1 Self Employment Tax (Schedule SE).
- Scroll down to the Self-Employment Tax (Schedule SE) section.
- In the subsection Nonfarm, enter the income amount in the field Net Income[A] (Codes 3 for taxpayer and 53 for spouse)
This input will only affect Schedule SE. It allows for calculation of IRA, Qualified plan adjustments and Self-employed health insurance.