Considerations
Brokerages do not track cost basis, and therefore, do not calculate an accurate gain/loss. GainsKeeper will calculate your gain/loss, adjusted for wash sales, corporate actions, etc. Some of these events could lead to your gain/loss being more or less than you expected. Additionally, there are some common data entry problems that can lead to your reported gain/loss being different than expected. When reconciling your reports at the end of the year, if you find that your gain/loss is off from what you expected, here are some things to consider:
Wash Sales - The number one reason for differences in expected gain/loss and reported gain/loss is wash sale activity in your account. You can review the Wash Sale Adjustment (WS ADJ) column in your year-end Unrealized Long/Short to determine if wash sales are deferring your losses to the next year. Additionally, you can review the detail view of your Realized/Sell Activity to identify wash sale adjustments. Finally, in the Custom Reports tab in the Tax Center, you can generate a Realized (No Wash Sales) report to use for comparison.
Note: Wash sales are required by the IRC. You should not use the Realized (No Wash Sales) report in lieu of your Schedule D-1 report. If you determine that wash sales are the reason for your discrepancy, no corrective action is required.
Expired Options - Because customers update accounts with varying frequency, GainsKeeper does not automatically expire options. If you have options in your account that expired worthless, and you have not recorded those transactions, these will not be reflected in your gain/loss.
Open Short/Open Long - Occasionally, a record will come over with an incorrect trade type. This happens most often with short options, but can also happen with short equities. The result will be that you end up with an Open Short/Open Long position, rather than an Open Short/Cover Short, or an Open Long/Cover Long (Buy/Sell) position. The Matching Unrealized Long & Short Lot tool in Check-Up will alert you to any positions in your account that potentially have this issue.
Missing Cost Information - When you set up your account, you may have needed to enter baseline records for positions carried over from prior years. Occasionally, users forget to enter a cost in these records, resulting in an entry with $0 cost. When these positions are sold, the result will be a 100% gain, because the record shows that there was no cost associated with the position. If you show a larger gain than expected, check for Baseline Records in your Trade Log with $0 cost.