By
eHow Personal Finance Editor
Difficulty: Moderately Challenging
Things You’ll Need:
- IRS Schedule D
- Records of short-term capital gains events
Prepare to Calculate Capital Gains on Short-Term Investments
Step1
Create an active transaction register or spreadsheet of all short-term capital gains events and maintain it throughout the year. Each line of your spreadsheet should reflect all details of an asset sale along with the details and cost of the corresponding purchase.
Step2
Add commission and brokerage costs to the purchase price of each asset bought and subtract corresponding costs from the sale price of each asset sold.
Step3
Reconcile the lines on this spreadsheet against your monthly brokerage statements as you receive them, just as you would reconcile your checking account register against your monthly bank statements.
Step4
Check the detailed report of your sales of stock or other securities that you receive from your investment brokerage for any transactions that may require special treatment or the help of an accountant, such as some short sales of stock.
Step5
Remove any transactions involving assets held for more than 1 year from your transaction register and keep separate records of these capital gains events for long-term investments.
Calculate Capital Gains on Short-Term Investments
Step1
Use your complete year transaction register at tax time to enter each short-term capital gains event on Schedule D, Part I, or a supporting detailed schedule if you experienced more than five short term capital gains events.
Step2
Enter the net sales price for each short-term asset sold during the year in column (d) of Schedule D, Part I. The net sales price reflects adjustments to the gross sales prices for commissions and other allowable selling expenses.
Step3
Post the corresponding cost basis of each asset, reflecting your purchase price adjusted for any commissions or other allowable purchase expenses, in column (e) of Part I.
Step4
Calculate your capital gains or losses on short-term investments by subtracting column (e) from column (d), then enter the amount in column (f) for each individual transaction.