Stock Markets Exposed

How should I keep track of stock purchases for tax purposes?

I am a very new to the stock market and would like advice on how to track my trades and filing. I have never done this before and dont know anyone who has ever traded in the stock market. All information on tax of stock trades would be very helpful. thank you All really goood answers. Thank you

Public Comments

1. I would keep the info that shows the date of purchase and the price, because when you sell it (if you do), this information will be needed for your tax return. You will pay taxes on the profit you made. On the other hand, if you sell it for a loss, this will also be shown on your tax return to decrease the amount of tax owed.
2. In January or February you should receive an IRS form 1099 from your brokerage firm. This form will list any gains, losses, or dividends from the previous year's stock trading. You just enter the amounts from your 1099 onto the appropriate lines on your 1040.
3. A lot of people I deal with keep a spreadsheet of purchases - including date of purchase, number of shares and price - that way when they sell, they can easily submit date sold, number of shares and price. All this is needed when you report the sales on your tax returns. The brokerage firm where you hold/sell your shares will send you confirmations for any shares purchased and sold which will include the above information respectively, and you will receive a 1099 at the end of the year showing dates sold, shares and prices, but a lot of the time it doesn't show when you purchased the shares and at what price the shares were purchased - this is usually the case if you transferred shares into the account at one time and the broker didn't submit the information to the system. You will want to keep all confirmations / 1099's just in case you need them to verify information. (You will need your 1099's for tax reporting purposes anyway - it will easily show all commissions, etc that you paid).