Calculating your Stock Gains and Losses

One of the most common error that we find when we prepare a tax return is that the taxpayer has not calculated his gains and losses on stock sales. This is really not rocket science! All that you need to do is when you purchase a stock, write down the total purchase price and the number of shares purchased along with the date of the purchase. Don't worry about the cost per share. Then when you sell the stock you will need to write down the number of stocks sold and the total amount you got for the sale and the date of the sale.

The purchase price is called the BASIS and the sale price is called the SALES PRICE. Not too hard is it? The following is what you need to give to your loyal tax preparer when you come to your appointment.

1. Date of purchase
2. Total cost (not price per share, the total dollars spent)
3. Number of shares purchased
4. Date of Sale
5. Total sales price (not the price per share)
6. Number of shares sold.

That's it. Now remember that you may have purchased these stocks in a previous year so don't just bring in the year end statement. We have no way of knowing how much you paid unless you follow these easy steps.

Oh, yah, the whole idea in stocks is to make money so here is a little hint.

BUY LOW SELL HIGH

Go get em tiger.