Wash Sales

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#1
Posts:
182
Joined:
10-Dec-2014 1:52am
Location:
New York
I have a client that have capital loss in two of his regular trading account. So we need to do wash sales analysis.
He and his wife together have 6 IRA, 401K accountts. I took a quick download on the activities of the regular trading accounts. Each have 20 trades - 30 trades of Losses, ranging from a few dollars to $500 losses.

How would you charge them?
With my other clients, I charge for processing fee of 2 hours of work plus the cost of the program $250. The program fee could be reduced as some years i have a few clients that needed that and I split the cost. But not this time. Should I bite the bullet and tell them about charge? it seems like manuelly reviewing them is a pain for me and It may cost more.
 

#2
Posts:
271
Joined:
23-Jan-2015 11:10pm
Location:
michigan
Is this for their 2023 activity? Why is it necessary to do this now rather than wait for his 1099-B's in 2024 if this is for his 2023 activity?

Why do the wash sales in his IRA and 401K accounts matter?

I charge for my time by the minute as I think this is fairest to clients. How is it that your charge of two hours is the same for all clients? Are you charging $250 per client for the tax software cost? All client's returns require different amounts of time for preparing their returns. That is why I don't understand what appears to be a two hour charge for every client.
 

#3
Posts:
182
Joined:
10-Dec-2014 1:52am
Location:
New York
keninmichigan wrote:Is this for their 2023 activity? Why is it necessary to do this now rather than wait for his 1099-B's in 2024 if this is for his 2023 activity?

Why do the wash sales in his IRA and 401K accounts matter?

I charge for my time by the minute as I think this is fairest to clients. How is it that your charge of two hours is the same for all clients? Are you charging $250 per client for the tax software cost? All client's returns require different amounts of time for preparing their returns. That is why I don't understand what appears to be a two hour charge for every client.


No. This is for 2022 tax returns that we are about to file.

The client has losses in the two regular accounts (taxable) in two brokerage firms. And we do need to review the IRA accounts (may not be 401k) to see if he has bought back any of the stocks. He traded both his regular accounts and IRA accounts.

The "2 hours" in this case is my estimate of the amount of time needed to do that analysis. I did something similar with my other clients who had roughly the same numbers of transactions. I try to save him money by sorting the records but it is driving me crazy try to scan though the sizable transactions. I do not make money on the wash sale program. It is just the cost of it.
 

#4
Posts:
3856
Joined:
21-Apr-2014 11:24am
Location:
North Carolina
I assume the $250 is the cost of the wash sale software. Years ago my boss had a client who day-traded with numerous accounts. Boss told client that he could either pay an hourly rate for a week of my time or pay the cost of the software plus my time (it was a couple of hours in the end). He cheerfully chose the latter and stopped day trading shortly thereafter.

I think it is perfectly reasonable to ask your client to pay the cost of the software when the alternative is much more costly. Computing the wash sale is an essential part of preparing a correct and complete return.
 


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