Stocks and accountancy

I recently discovered that there’s a substantial tax break if you sell stocks after having held onto them for over a year, versus selling stocks you’ve had for under a year.

It’s the kind of thing I wish my accountant had told me when he saw all those stock sales and buy backs I did last year in some of my early stock-trading experiments.

I’m deeply unhappy with my accountant, who doesn’t seem capable of explaining things to me that need to be explained, like that for instance. He is, however, superior to my accountant the year before who was a rote incompetent. That first accountant was recommended to me by my boss, the second by my mother. I’m wondering if incompetency is endemic to the accounting profession.

But the real question I have now is, how does one find an accountant other than word of mouth? Surely randomly picking someone in the yellow pages is a recipe for disaster, and my taxes are complex enough (especially as an independent contractor) that I don’t trust some McFirm like H&R Block. Is there some kind of Zagat guide to accountants where one can get some kind of independent appraisal of the accountants in a given area? Anyone have any thoughts?

3 Comments »

1. From what I can tell, referrals are still the best way to go. Also, going with a CPA (if you haven’t yet) would probably be your best bet. My sister just took the first section (of four) of the CPA exam. She spent hours a day for months studying; anyone who can pass something (four things, actually) that takes that much study cannot be incompetent, or so I would imagine.

   Comment by Scott Nellé — May 19, 2008 @ 9:19 pm

2. I think both of the last two were CPAs. Passing an exam does not necessarily make you competent. Think of doctors; those guys work their asses off to get through med school and then residency and everything and world is full of incompetent doctors.

   Comment by Eric Rosenfield — May 19, 2008 @ 10:50 pm

3. All I can add is that CPAs also seem to make really bad small business owners, when they decide to retire from the accounting and buy a franchise, based on my admittedly-limited personal experience. In case you were looking to invest in a business and thought that maybe having a CPA at the helm would make it less likely to run into icebergs.

   (Also, I bet you think that there are incompetent lawyers out there - don’t you know how long they have to study and how hard the Bar exam is? What are you, some kind of anti-authoritarian radical?)

   Comment by bellatrys — May 31, 2008 @ 7:50 pm

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