How to file for taxes?

Question

IF I trade stocks each week, does the brokerage report it to the IRS and then send me the form to me with all the stocks traded? I'm just confused. By the way, I'm a student. Can you explain me the process?

Answer 1

At the end of the year they'll send you a form showing all of your sales, and will also send that info to the IRS.  Most brokerages also show any other transactions, like purchases or reinvested dividends, on your year-end statement.

You'll get a confirmation form for each transaction, send out very soon after it takes place.

Answer 2

It depends upon your broker.  But you should keep a log or copies of online statements, so you can account for purchase and sales price and trade commissions.

If the 1098 reports "gross" sale price (total price of shares sold, without trade fee), your cost basis would be initial stock price plus purchase fee and sales fee.

If 1098 is "net" (sale fee already deducted), cost basis would be initial cost including purchase trade fee.

You might get some clue whether you history shows prices with trade fees included or accounted separately.