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

To: Brendan W who wrote (383)	1/4/1998 11:52:00 PM
From: Box-By-The-Riviera™	Respond to of 5810

make sure your cpa understands the number and frequency and holding periods of your trades regarding classification under trader status..... also trades must take place consistently throughout the year.... not haphazardly. as to capitalizing your margin interest.... no idea here. don't know why it can't simply be expensed on sched c... period. more of a question than an answer. Joel

To: Brendan W who wrote (383)	1/5/1998 7:14:00 PM
From: Colin Cody	Respond to of 5810

You may do well with your current CPA. And perhaps you should STAY as an INVESTOR. BUT if you are planning on going into the Trade or Business of TRADING then unless you run say $5,000+ a year for CPA services, I would suggest that you NOT expect your current CPA to learn enough of what there is to know about this rare form of business. . If we were to assume you pay $250 to $750 a year to the CPA for your tax work, there just isn't enough room there to do the thorough research necessary to fully comply with the law, as determined by various TRADER court cases. . So bottom line... Keep your CPA and stay an INVESTOR, or find someone with the experience already AND be prepared for higher fees and potentially additional audit fees (to the CPA), and potentailly back taxes and penalties/interest if the IRS prevails under audit. . Colin . BTW a trader would not capitalize margin interest, as might a construction contractor. It might seem LOGICAL based on normal trade or businesses, but a TRADER is far from your normal situation. You will find that "no one" in the tax preparation and FEW in the tax advisory professions will have an acurate grasp on TRADER status. BTW2, I was watching CNBC over New Year's and a CPA and a "Big 6" tax consultant were fielding questions. TRADER status came up - on National TV - and these two experts answered "from the seat of their pants" based on what one would expect to be "the normal & logical" way the IRS would look at it. They were both DEAD WRONG, on National TV! (g) They made a minor retraction after the break, but they let stand materially incorrect statements they made about TRADER STATUS.