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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: LastShadow who wrote (4240)12/9/1997 8:02:00 AM
From: toothdock  Read Replies (3) of 120523
 
Last-More info on tax consequences:

The Barrons Article refers to the 1997 Tax Relief Act, and specifically the definition of a "trader." The basis of the new rule in the 1997 act is to allow mark to market claim for stock trades both for profits and losses. The problem is two fold:

1. The definition of a trader will still be held to stringent standards. If in fact one opts to apply the definition, you can be assured that there will be the requirement to pay self employment taxes.

2. When using mark to market analysis, realize that the whole issue of capital gains is out the window, and all gains will have to be based on ordinary income, and taxed at a higher rate.

3. The issue of deduction of business expenses for trading will still be scrutinized, as the IRS always is alerted when these expenses arise in a non-ordinary business.

Need more info: toothdock@prodigy.net

Not bad for a third year law student-eh?

trade with #profits

toothdock
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