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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: henry jakala who wrote (302)	12/23/1997 8:39:00 AM
From: Colin Cody	Read Replies (1) \| Respond to of 5810

Your "trader" contacts need a rare CPA who knows what the h@ll s/he is doing (g). . Clearly any INVESTOR or Day-TRADER reporting sales of securities on their Schedule C is having his tax return prepared incorrectly. . If you make a living from doing dayTRADING you simply do NOT pay SS or Medicare tax, PERIOD. . I'd have to sadmit that most CPAs or EAs or other tax pros that I speak with haven't a CLUE what I'm talking about when I discuss TRADER STATUS. . When looking for guideance, start right off asking the CPA if he handles STOCK TRADERS and if so to briefly explain the difference in handling a TRADER vrs an INVESTOR. . You should know from his response within 45 seconds if he has what it takes to handle your return... i.e. within 45 secinds you'll ELIMINATE 499 out of 500 preparers, IMO. . Colin in CT

To: henry jakala who wrote (302)	12/25/1997 1:10:00 AM
From: Box-By-The-Riviera™	Read Replies (2) \| Respond to of 5810

If you elect trader status (which is hard to qualify) cap gains would be reported on schedule d....but you can deduct your investment expenses on sched c.... If you are eligible for trader status.....and then elect mark to market rules.... all of your cap gains will go on sched c, instead of d, and yes....you will have to pay self employment taxes....but in this case, another benefit would be....all cap gains become ordinary income (self-employment)... and wash sale rules no longer apply. Trader status is something you have to qualify for every tax year....it's not forever. but....if you elect mark to market rules, you must always mark to market for any year in the future that you are qualified under trader status..... you definitely should make sure you REALLLLLLLLLLLY do qualify...or you will be very sorry down the road if you get audited. also....mark to market rules have complicated implications... better get a GOOOOOD tax professional..... if you get involved in this..... this information, BTW, doesn't come cheap. Joel