IN THE MEDIA: WALL
Wall Street Journal (3/1/13) "When
Your Broker 'Outs' You" (Tax Report), By Laura Saunders. Robert
Green & Darren Neuschwander are quoted in the article.
- Excerpt: Check 1099-Bs for mistakes. Robert Green,
an accountant who heads GreenTraderTax, a tax preparer for more than
1,000 investors, urges taxpayers to double-check brokerage cost-basis
reports against their own records. "Often the 1099-Bs don't match
trading logs," he says, especially for frequent traders. In some
cases, he has seen income over- or understated by $10,000 or more. Problems
arise most frequently with wash-sale reporting, he says. Investors subject
to the new reporting should think twice before filing early, says Mr.
Green's partner, Darren Neuschwander. Last year, some clients received
five corrected versions of the same 1099-B, he says. Early indications
are there will be many corrected forms this year, too, he adds.
Wall Street Journal Blog (5/3/12) "IRS
Delays Cost-Basis Reporting for Bonds and Options" (Total Return),
By Laura Saunders. Quoted Neuschwander for this important story update.
Green NFH may be succeeding in getting the IRS to offer relief.
- Excerpt: Experts welcomed the news. “Considering
the trouble we’re having with rules already in effect on the cost
basis for stocks, it makes sense to delay the rules on debt and option
reporting,” says Darren Neuschwander of Green NFH in Robertsdale,
Ala., who has a nationwide practice for active investors.
Wall Street Journal (3/30/12) "Last-Minute
Tax Tips" (Tax Report), By Laura Saunders. Green & Neuschwander
are pushing top tax writers to advance the story.
- Excerpt: Darren Neuschwander, a CPA and co-head of
Green NFH in Robertsdale, Ala., says he is reluctant to sign returns
given the current confusion. Mr. Neuschwander estimates that 80% to
85% of his more than 1,000 stock-trading clients have incorrect or inconsistent
1099-B forms. He expects to file extensions for most of them to work
out glitches. Robert Green, also a co-head of Green NFH, says the problem
isn't limited to people who make hundreds of trades in a year. "We
had a client who only made seven stock trades last year, but on the
1099-B six out of seven didn't match the broker's trade confirmations,"
he says. Both accountants say they have seen issues with every brokerage
firm their clients use.
Wall Street Journal
a 'Cost Basis' Crisis" (Getting Going), By Karen Blumenthal.
Green & Neuschwander are breaking the story about botched 1099-Bs,
apples and oranges and a tax filing stalemate. Our angle to this story
is just getting out. If you are in the media, please contact us to discuss
this story soon.
- Excerpt: Try not to rush your return. Investors
were supposed to receive the new 1099-Bs by Feb. 15, but a number of
firms sought extensions of up to a month to get correct data out to
investors. Corrected forms could still arrive in coming weeks. Robert
Green, whose accounting firm Green & Co. represents active traders,
says he has seen numerous errors and discrepancies between 1099-Bs and
his clients' calculations and will be seeking extensions while the differences
are sorted out.
NEW YORK (Dow Jones)--Trader Tax Status Holds Benefits if You Qualify
By ARDEN DALE
December 12, 2006; Page D2
If you're a serious stock trader, you may be eligible to get a serious
tax break. For those who qualify, so-called trader tax treatment can be
a real boon: They are able to deduct extra expenses and, even better,
can elect to write off all trading losses.
Not everyone who trades a lot is eligible, however, and trader tax status
is considered complicated and controversial, even among certified public
accountants. "It's the greatest thing since sliced bread, but you
don't want to get caught in the slicer," says Robert A. Green, chief
executive of GreenTraderTax.com and author of "The Tax Guide for
Trader tax status was created by the Taxpayer Relief Act of 1997, near
the height of day-trading mania. People who trade heavily have been getting
the break ever since by filing returns as "traders in securities."
It isn't clear how many people actually get the status, and the Internal
Revenue Service hasn't tracked the data, according to a spokesman.
Trader tax status has two main benefits: First, it allows more business-expense
write-offs. A regular investor gets limited expense deductions, while
traders get an almost unlimited number.
Second, trader tax status lets some people write off all trading losses
by choosing to use "mark-to-market" accounting. In mark-to-market
accounting, a trader calculates the worth of his securities based on their
market value at the end of the year. If the stock has gone down in value,
he may report a loss without actually selling it. Conversely, if the stock
has gone up, he must report a gain.
You must elect to use mark-to-market accounting in writing before filing
a return, and you should file IRS Form 3115 a year later, according to
Colin M. Cody, a Connecticut CPA who founded the Web site www.TraderStatus.com
in the late 1990s. If the mark-to-market election isn't made, a trader's
gains and losses are reported as capital gains and losses on Form 1040
Schedule D. "For many traders, mark-to-market is a worthwhile election,"
says Mr. Cody. "They should always talk to an adviser, though. It's
permanent, and there are situations where it's not appropriate."
Being able to write off big losses is what tempts amateur traders to
try for trader tax status. Desperation drives some who clearly wouldn't
qualify to hope for the break. A real-estate mogul recently asked Mr.
Green if he could get trader status to write off $3 million that he had
lost in gold futures. The answer was a resounding "no," because
his trading had been only sporadic.
Many do use trader tax successfully, however, from stay-at-home parents
to surgeons, laid-off workers with buyout packages and even college kids
who trade avidly.
To qualify, one must meet certain tests. Heavy trading of stocks, futures,
foreign exchange or other instruments is a requirement. One also must
profit from daily market moves rather than dividends, interest or capital
Still, many tax advisers say IRS rules on trader tax are vague enough
to cause problems. "It's a gray area," says Thomas P. Ochsenschlager,
vice president of taxation at the American Institute of Certified Public
Accountants. "I think someone is being aggressive if he has a day
job and tries to claim the tax benefit of being a trader. The burden of
proof for someone like that would be substantial."
Write to Arden Dale at firstname.lastname@example.org