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Tax Analysis of Securities Transactions (TAST)
We've created this resource page to share the knowledge and experience we have gained from building TaxGopher®, a product that offers truly comprehensive tax analysis for securities transactions
(read our TAST section below). And from creating TaxGopher+, our Complete Cost Basis Reporting solution.
We want to try and help make it easier for you to calculate disallowed losses on your portfolios and still remain fully compliant with the tax code. Our resource page offers tax practitioners and compliance officers both general as well as more in-depth information and definitions for wash sales, straddles, constructive sales, qualified dividends and dividends received deduction as well as deep explorations of the concepts “substantially identical securities” and “offsetting positions.”
What is Tax Analysis of Securities Transactions (TAST) ?
The idea behind tax analysis for securities transactions is rather simple: compute accurate portfolio tax liabilities triggered by sections of the tax code pertinent to securities transactions. This is no easy task. It requires in-depth knowledge of BOTH the U.S. tax code (wash sales, straddles, constructive sales, qualified dividends, dividends received deduction and short sales) AND securities trading.
Here’s what’s involved:
- analyze reams of trade data
- identify taxable events, such as wash sales, straddles, constructive sales, qualified dividends, and dividends received deduction
- understand how these taxable events impact capital gains and losses, both on an individual level and how they interact with one another (i.e. a non-wash sale becomes a wash sale because of the effects of a straddle)
- use all this information to determine actual realized gains and losses, which determines how much you will owe the IRS.
As a leading tax analysis and compliance software provider, we at G2 FinTech know how difficult it can be to get this right and in a timely manner no less. We’ve learned this first hand from our own extensive research and from hands-on experience helping our many clients — leading hedge funds, fund administrators and prime brokers — calculate tax-based adjustments on securities transactions.
It’s true that the current Cost Basis Legislation (CBL) rules, per the Economic Emergency Stabilization Act of 2008 (EESA), have no doubt shined the spotlight on terms like wash sale software, wash sale reporting, wash trades, cost basis reporting, wash sale calculator and wash sales. Well before this legislation and the threat of hefty IRS fines for noncompliance, we at G2 FinTech have been helping our clients comply with the IRC, not just cost basis reporting requirements. Our software helps our clients understand how trading transactions, regardless of the securities involved, can or cannot result in taxable events and as a result affect disallowed losses. Our clients wanted more than just wash sale software, a wash sale calculator or wash sale reporting capabilities. They wanted a comprehensive tax management solution that addresses wash sales AND straddles, constructive sales, qualified dividends and dividends received deduction as well. To meet our client’s needs, we built TaxGopher®.
Learn about TaxGopher, our powerful tax analysis software engine for cost basis adjustments
that provides accurate information on taxable gains and losses. Get information about TaxGopher+, our Complete Cost Basis Reporting solution.