Ally Invest Problems?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Posts: 31
Joined: Thu Apr 06, 2017 9:48 pm

Ally Invest Problems?

Post by Oblivious » Sat Feb 17, 2018 11:38 am

I'm hoping someone might be able to offer some advice on this. I did a bit of tax loss harvesting this year (or thought I did). I executed a lot of trades this year on a FIFO basis, but my tax documents show that I did them on a LIFO basis. This has left me with a very large unexpected tax liability because I thought I was tax loss harvesting, and it got recorded as short term gains instead.

While their website shows that you executed a trade on a FIFO basis, their clearing house doesn't match up with the website. The website shows that have a realized loss for the year (as a result of tax loss harvesting). My tax documents show that I have a lot of short term gains this year and I owe thousands dollars in taxes. Ally did finally explain to me how this happened. They said that they use multiple clearing houses. That while the website shows one thing, the clearing houses don't always show the same thing. The clearing houses had my basis set to LIFO, while the website has everything set to FIFO. There's no way for me to see that the clearing houses show LIFO either. As a result the website shows something completely different in how the trades were executed compared to the clearing house. Seeing what the clearing house sees is not something I have access to, so I have no way of knowing that the trades get executed differently than what I see on their website.

Ally told me that they have had these system issues 5 years and there's no way I would've been able to catch the above. The reason being that I don't have any access to how the clearing house sees the trades being executed. Ally bank has pretty much just told me that it's an issue they've known about for years and because of their system issues, I'm stuck with this tax liability.

Anyone know if there's anything that I can do about this? I'm not too happy about tax loss harvesting to have a tax writeoff, only to find out I owe thousands of dollars in taxes. Then have Ally admit that it's a system issue that's caused a lot of people problems for years that they haven't been able to fix.

Post Reply