Cost basis - Warning tax related topic

[jethrod3]

Originally Posted by raulus

Apologies if my response came across a little strong. Maybe as a CPA, it just seems pretty simple to me, because that's what I do every day. Similar posts around here from time to time asking about tax on a $10 gain on small sales probably stick in my memory a bit more than the usual bear, and lead to my supposition that there's a fascination with small potatoes.

The general concept shouldn't be that difficult, although if you are constantly buying and selling it might be a lot of recordkeeping work. When you buy stuff, keep track of what you paid for it. If you didn't keep track of it, then give it your best guess, and hopefully if the service calls you on it, you can explain how you estimated your basis. At the same time, it's hard to imagine that the service is going to invest the resources necessary to challenge you over a few bucks here and there. If it's anything substantial, then hopefully you have some solid records, and therefore you don't have to guess, and if they call you on it, then you can prove it.

I get that for everyone else who isn't a CPA, this is a PITA and not something they want to deal with, particularly because there's nothing like taxes to suck the joy out of everything. And that's probably why my clients pay me way too much to take care of a lot of this stuff for them, so they can focus on the fun.

Thanks and no need to apologize---I thought your response was great and I really appreciate the fact that we have learned folks as members of this forum that are willing to spend time sharing their knowledge with those of us that can definitely use the advice. For the record, I still do my own taxes without a computer and I try my best to stay up on all the tax changes that apply to me. Not the most complex of tax situations to wade through, but several of the more common schedules and worksheets at both the federal and state levels. I also try to keep my brain sharp by doing all the calculations by hand first, although I do check my math with a calculator. I like math, so it makes the process of filing taxes a little more stimulating! I guess I'm odd that way!