Booyah Breakdown: Taxing Questions

Can a trader prepare his tax return with TurboTax or any other tax preparation program?

It depends on the program. If it has an option that allows you to enter the information directly onto the tax forms, you should be OK.

For instance, I talked to the folks at TurboTax, and they said you could file as a trader and elect to mark your trades to market if you enter the information yourself using the forms mode. Just be sure to follow the instructions I detailed in a recent column.

Still, this stuff is complicated. So you might want to consider getting professional help.

Subprime Has Legs

I got a ton of great comments and questions from readers after my subprime story went up.

To start, a reader asked "who ultimately ends up holding these subprime loans? If the subprime lenders just turn around and securitize the loans, why are they the ones taking huge losses to their balance sheets and not the owners of the mortgage-backed securities/collateralized debt obligations?"

This is a great question, especially since Fannie Mae (FNM Quote) recently told New Century Financial (NEWC Quote), once the nation's largest independent provider of subprime mortgages, that it would no longer buy its loans made to borrowers with poor credit. Bummer.

But this is a fairly complex issue, so the Booyah Breakdown will tackle this topic next week. Stay tuned.

Many readers also pointed out that the subprime contagion has lots of legs and that other, more obscure areas may get hit.