IRS, Tax related strategies--Traders Message Board

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Strategies & Market Trends : IRS, Tax related strategies--Traders

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To: lizard lick who wrote (356)	6/22/1998 11:12:00 AM
From: Colin Cody	Read Replies (1) of 1383

Lizard, Well stated assumptions and questions! Am I, until laws dictate otherwise, actually able to deduct expenses via Schedule C, report income in the form of [mostly/all short-term] capital gains via Schedule D, all the while avoiding self-employment taxes? ABSOILUTELY! . could I expect to hold my own if audited based on the tax law as we (you) know it today? I DON'T KNOW YOUR EXPERIENCE LEVEL. AS I HAVE STATED BEFORE, 99% OF ALL AUDITORS HAVEN'T A CLUE WHAT A TRADER IS. THEY WILL AUTOMATICALLY RECLASSIFY ALL SCHEDULE-C ITEMS TO SCHEDULE-A, LINE 22, SUBJECT TO THE 2% AND 3% LIMITATIONS, THEY'LL RECLASS BUSINESS INTEREST TO INVESTMENT INTEREST AND THEY'LL CANCEL ALL SEC 179 DEDUCTIONS, ETC . IF YOU HAVE GONE FACE-TO-FACE WITH AUDITS IN THE PAST, THEN SURE, YOU MIGHT DO OKAY WITH THIS TYPE OF AUDIT TOO. . IMO EVEN A TAX PROFESSIONAL WOULD HAVE HIS HANDS FULL WITH A CHALLENGE AGAINST BEING A TRADER. THERE IS THE NEED NOT ONLY TO DEFEND THE POSITION, THERE IS THE NEED TO EDUCATE THE AUDITOR THAT THE LAW SAYS THERE EXISTS A POSITION THAT MAY BE DEFENDED! . Colin

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