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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (1235)	1/16/2001 3:25:52 PM
From: Cooters	Read Replies (1) \| Respond to of 1383

Dan, <<This and everything else I have read about trader status says that self-employment taxes are not incurred on trading income. The answer to your question appears to be YES, trading income is not considered self-employment income. I don't know anything about the exception they cited, except that 1256 contracts has something to do with certain index options and possibly futures. I think it should be of no concern for stocks and equity options>> I just had the IRS clarify this for me via E-Mail. You are correct. Here is the answer: ________________ If you are considered a "trader in securities" in the business of buying and selling securities for your own account then you would file your capital gains and losses on schedule D and other expenses on schedule C. The losses on schedule D would be limited. They will not be subject to SE tax. Please see publication 550, page 64, for a discussion of the special rules for "Traders in Securities". _______ Thanks, Cooters PS - Now, the next question<gg> What is deductible? I'm thinking the basics; publications, online access/cable modem, cell phone.