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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures
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To: Chip McVickar who wrote (44398)4/13/2001 1:31:59 PM
From: Esteban  Read Replies (6) of 44573
 
Can anyone direct me to a treatment of commodity trading tax matters? 2000 was my first year trading commodities, and I'd like to start out filing a tax return properly and to my best advantage.

In searching for answers, I came across this trader site that wants to sell a trader tax guide. The guide mostly covers the issues facing traders in securities, but touches on commodity trading also. Here's and excerpt about commodity trading:

Joe trades both securities and commodities. There is different tax treatment here based on the new trader tax laws of 1997 (for securities) and the older trader tax laws of 1986 (for commodities). These differences affect Joe's self-employment taxes, health insurance premium deductions, retirement plan contributions, ability to deduct losses on trading commodities and the 60% long-term capital gains rate benefit for commodity traders.

This short paragraph raised a number of questions.

I understand the basic form 6781 and schedule D treatment of short term and long term capital gains.

I'm not clear about whether to use schedule C to report expenses only. Does doing this avoid self employment tax and preserve the 20% long term rate?

I'm completely in the dark about deducting health insurance premiums, retirement account contributions, and the treatment of losses.

I appreciate any direction the thread can give me.

Esteban
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