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Green back from skiing vacation to answer your questions.
Answers.
Let's assume I make $100,000/yr from my full time job.
Also made $100,000 from trading stocks with about 500 trades annually.
Spending about 30 hours/week.
1. Can I be qualified as a trader? - Answer, yes.
2. If I didn't have my full time job, would it make any difference? - Answer, yes it would make a more definate yes that would be harder to challenge. I believe that past tax court cases are pre-Internet Trading and do not address the significant changes in the trading business. It is now very easy establish and operate a serious daytrading business from your home, followed up at work and even in your car.
3. If I made half of my trading income from regular account and the other half from tax deferred pension account, how does it affect my trader status? - Answer, it doesn't.
4. Can you give an example who will be 'safe' to report as 'trader with MTM election'? What are the key qualification factors that decides the status of a trader? Answer - I raise many questions in factors in our Questionnaire to determine if you qualify. People can buy it for $15, or it comes free with our Trader Tax Guide for $25.
The factors are your intent to carry on a trading business and the facts and circumstances that support that intent. Your trading should be frequent (daily or study the markets daily), continuous (all the time, not just during one quarter or when you think the markets are hot), and significant (many trades on many days). You should be spending a good portion of your time away from work and even at work (your employer may not like it) following, studying and trading the markets.
If you are the type to spend alot of time on SI message boards, you probably are putting in the hours that are required. If you make or loose alot of money in the markets from these very active efforts and only make a little money on dividends and interest then obviously your portfolio income is derived from quick short term profits (or losses) rather than investment positions.
greencompany.com
TIA,
Jon |
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