Keeping records of stock purchases and sales and completing the tax forms to report capital gains and losses is tricky enough for the average investor. But for day traders, who spend their days flipping stocks, and for a growing army of other investors who trade often, lured by the bull market and the ease of trading on line, compliance with tax reporting rules creates a mountain of paperwork each year.

Just ask John D. Rankin of Osprey, Fla., who spends 20 hours a week managing his portfolio. He figures he makes 150 to 300 trades annually.

“It’s a tremendous task to put together all those capital gains,” said Rankin, who, in addition to managing his investments, is working with his wife, Bobbie Walck, to refurbish a motor yacht that sleeps six.

He has even considered paring back his portfolio, which averages roughly 200 stocks, to alleviate the pain. Paying taxes is not the problem; he figures that is the price of successful investing. Rather, the headaches come from sorting through the folders and spreadsheets he keeps to document his stock trades.

“It becomes painful to compile all that information, and you just want to walk away from it,” he said.

Rankin, 49, began investing in the stock market when he was 21. His initial stake: money that he earned selling newspapers and shares of Laclede Gas that his father had given him when he was 6 years old. After graduating from the University of Missouri with a bachelor’s degree in business and public administration, he worked in his father’s company, which distributes industrial products to the wholesale plumbing and drilling trades.

At the same time, he refined his trading technique by talking stocks with stockbroker friends over drinks after work. “You look at p/e’s and pricing, and you begin to learn,” Rankin said. “As you go through periods of good and bad investing, you ask yourself, how can I do better next time?”

Before he turned 30, he took much more investing risk than he is willing to take today. “Now I’m looking for ways to protect myself by looking at asset allocation, reviewing the fundamentals on particular issues and balancing sectors,” he said.

He trades on line using Street Smart, an investing program from Charles Schwab & Co. that lets him update stock prices daily and provides price charts and data like individual stocks’ dividends and price-to-earnings ratios. The program also tracks his price per share, and calculates gross and net gains.

Rankin said he made about half his trades on the Internet, after using Yahoo to search for information on companies and their stocks.

“The Internet lets me access information in a timely fashion,” he said, adding, “It’s hard for individual investors to get economic access — or even any access — to information from Goldman, Sachs and other big brokers.”

He has accounts with three brokers: Schwab, Olde Discount Brokers and Stifel Nicolaus & Co., a full-service broker in St. Louis, where he lived until his brother bought him out of the family business in 1997. Stifel manages part of his holdings for a fee, and he also trades independently at the firm.

Stifel prepares a running monthly compilation of his short-term and long-term transactions, “which helps me manage my capital gains,” he said.

Dealing with three brokers means triple record-keeping. “I maintain a book of account for each brokerage account and files for each company that I trade with,” he said. “Every trade that I do is deposited in the files and then entered manually into my computer.”

At year-end, the paperwork multiplies. Stifel prepares separate capital gains schedules for each money manager with whom Rankin worked — there were four in 1998. And Rankin maintains both taxable and tax-deferred accounts with some of the managers, which complicates the paperwork.

All his Schwab trades are automatically recorded by Street Smart; he manually enters his Olde transactions into that program, too. Then he checks data from Stifel and Street Smart against his own records. When he ascertains that everything is correct, Rankin, who prepares his own return using Turbotax, enters all sales on Schedule D.

After that, he does what any good taxpayer would do. “I take two Excedrin,” he said.

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