 So there might be some shortcuts in the data input for that kind of tedious process when you have a whole bunch of trades. So just to kind of keep that in mind. Also just note that it used to be that the date acquired and the cost are usually the most problematic things to come by from the investments. And it used to be that the financial institutions, remember, they're just kind of facilitating your trades. So they used to be that you're the one that's ultimately responsible for that information. And it used to be the financial institutions. Finest financial institution this side of Missouri. Weren't held as closely responsible for that stuff. But more and more they've been trying to pressure the financial institutions like with every kind of area which does make it easier on a tax preparer like me. So to get them to give you the date acquired as well as the cost. Now the cost gets quite complex because you might have a stock that was for example inherited to you or the stock might have had stock splits into multiple different companies or the stock has changed. So the cost can actually get quite cumbersome, quite complicated. And sometimes the financial institution may not give it to you or they might say this is like what we guessed the cost is or something and you might have to go through some kind of estimate to kind of figure what the cost is. So that gets a little bit messy but those are the main three boxes that we need and we might enter them like I say one by one transaction into the system or try to summarize the short-term and long-term transactions and then provide the detail to the IRS. And then you've got a crude market discount wash sale short-term gain or loss, long-term gain or loss. And so short-term and long-term will have differences in taxes in terms of generally whether it's gonna be subject to ordinary income which is not tax rates that is or is it gonna be subject to capital gains rates which are typically favorable rates. So check collectibles if they're collectibles or not. Now you could have withholdings from your stock sales most of the time, most people don't because they're withholding through their W-2s or their distributions if they're in retirement from their pension plans. So you don't see that all the time but it's possible because you do have a gain situation possibly that someone withholds the tax and if you sell a whole bunch of stocks at one time then quite likely you might want to withhold if you can at that point there or make an estimated payment when you pull the money out. A lot of times people pull money out and they don't really take into consideration the tax consequences in part because they've been taken out of the system of actually thinking about taxes because the IRS has forced the employer to take that role. That means that we really get paid oftentimes whatever we get paid after taxes and we just think, you know, whatever but then when we do something that has a tax trigger and event we don't even think about taxes because we feel like, didn't the employer take care of that? Well, no, it's your financial institution and the employer's not involved. But in any case reports to the IRS gross proceeds versus net proceeds, check if loss is not allowed profit or loss realized, unrealized profit and so on. So those are the main boxes you can also have the state. Line seven, capital gain or loss if you sold a capital asset such as a stock or bonds you must complete and attach form eight, nine, four, nine and schedule D. So these are going to be the tax rates remember that we have a progressive tax system and we have the normal or ordinary tax rates and for the reasons discussed before the capital rates might have a beneficiary rate if you qualify for them by having like the long-term capital gains as opposed to the short-term capital gains. Now, how are they going to then dish out or serve up those more beneficial rates when we have a progressive tax system and everybody is not already taxed at one rate because it will mean that higher income individuals will have a more favorable rate which will still be like 20% whereas lower income individuals the more favorable rate may bring the capital gains rate down to zero. Therefore, we have a structure where we're going to be applying the progressive tax tables to ordinary income separating the capital gains to the capital gains subject to a favorable rate and then determining which of these favorable rates would apply based on their income level and doing that calculation noting that on the tax software you're not really going to see all that happening usually because we often rely on the software to do that calculation of the actual tax. Therefore, we often recalculate with our tax worksheet, for example, the taxable income rely on the worksheet on the software oftentimes to apply the complicated table structure of the progressive tax system and break out these separate taxes, favorable taxes for capital gains and possibly qualify dividends, for example. So if single and income zero to 41.675 zero percent up to 15% if it's 41.676 to 459.750 and up to 20% if it's 459.751. So the general concept you would be explaining to someone then if they were asking about the capital gains is that if you have the long-term capital gains you might have a favorable taxable gain rate no matter what your income is for incomes that are lower income levels then the favorable rate would be zero. If you're at a mid or moderate range you would be 15% for many people probably most people and then if it's a high income level then the favorable rate would be at 20% because the marginal rate of those individuals would be higher than that due to their progressive tax system and their income level they are at. Exception one, you don't have to file form 8-9-4-9 or schedule D if you aren't deferring any capital gain by investing in a qualified opportunity fund and both of the following apply. One, you have no capital losses and your only capital gains are capital gain distributions from forms 1099-DIV, box 2A or substitute statements and two, none of the form 1099-DIV or substitute statements have an amount in box 2B unrecaptured section 1250 gain box 2C section 1202 gain or box 2D collectibles 28% gain. So the general concept here when you're doing your data input would be if you have the 1099-B that reports the sale of stock and that usually is reflecting someone actually the taxpayer actually selling the stock then that will be provided and you're gonna have to look up the sales price and then subtract out the cost to figure the gain using say a schedule D. However, as we saw when we looked at the interest and dividends the 1099-DIV in particular when you have distributions from the corporation those are gonna be a different kind of income. So if you're investing in stocks for example or bonds, if you're investing in stocks and bonds you might have income related to interest which would be bonds typically paying out interest for example or you might have dividends which would be the company distributing out the retained earnings of the company in the form of dividends to the owner of the company that being the shareholders or you could have capital gains which is our focus here which typically is triggered only when the actual stocks are sold the gains then being realized at that point in time. Now sometimes when you have a distribution from the company to the board of directors or whatever decides to give out money to the shareholders it might dip into not just the retained earnings but also into maybe like the original investment from the distribution of the original stocks and in that case they might have to classify it not as a dividend but rather as a capital gain and instead of giving a 1099-B for that transaction because you didn't facilitate the transaction you didn't decide to sell the stock they decided to give a distribution and so it was an involuntary kind of transaction on your end you own the stock you vote for the board of directors but they then decide what the dividend distributions will be and so on then it's gonna be reported on the schedule 1099-DIV generally so then you would just record it from the data input standpoint as capital gains with a 1099-DIV and you may not need to generate then a schedule D the software if you have software doing that the software might not populate a schedule D unless you have these other boxes 1250 gain and so on so the thing you need to know logistically is if you get a 1099-DIV and you have something in the box for capital gains then you're just gonna plug that into the box in your tax software and it'll typically then calculate it as capital gains and may or may not generate a schedule D depending on the needs and then you can basically wanna deconstruct that and say well why does that make sense and when you talk to someone like a client be able to explain the difference between a dividend which has ordinary versus qualified dividends the qualified dividends might have favorable tax treatment and the distributions of a capital gain which might mean that they distributed something over and above the retained earnings therefore classified it as capital gains instead of normal distributions and you might have capital gains rules which once again you could have favorable tax treatment