G2 Systems LLC an innovative software and consulting firm specializing in investment management, accounting and operations systems, today announced that it has added a new piece of functionality to its tax analysis engine TaxGopher that will identify and treat constructive sales.
A constructive sale occurs when an investor takes an offsetting position to an already owned position. Transactions considered to be constructive sales include making short sales against similar or identical positions (known as âshort sales against the boxâ) and entering into futures or forward contracts that call for the delivery of an already held asset.
âConstructive sales treatment, running alongside our accurate wash sales treatment functionality puts TaxGopher way ahead of the competition,â said G2 Systems Principal George Michaels. âWe knew there was a void in the marketplace for this type of product because our clients have been demanding the functionality yet nobody seems to have it. Further, our product road-map calls for a subsequent, near-term release of the capability to handle the tax effects for straddles.â
TaxGopher helps hedge funds and their service providers â the prime brokers and fund administrators â produce accurate K-1âs, lower administrative tax costs, and have a better fix on their P&L. In addition, it will serve as the cornerstone of a cost-basis solution for broker dealers and private wealth lines of business that must soon be in compliance with cost basis legislation emerging from the Emergency Economic Stabilization Act of October 2008.
âMore than 200 hedge funds have been using TaxGopher for their wash sales reporting since we launched this innovative cost basis solution a year ago,â continued Michaels. Now with this new added functionality for identifying constructive sales, we expect that many more firms will want to use this tool.â