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

To: Colin Cody who wrote (27)	2/16/1998 2:24:00 PM
From: Street Walker	Read Replies (2) \| Respond to of 1383

Trader Status........................IRS audit I consider myself a full time trader. It's my only source of income. I wake up 5 days a week 1 1/2 before the market opens and search for hot news, along with analyzing news all day. I pay for real time data feeds to run expensive charting and TA software. I pay for cable to have my data feed and to watch CNBC all day. I pay for Level 2 and for a real time news service. I have 3 phone lines to run a couple of computers/internet connections. My execution software: vlcn.com I buy stocks only for the day. For the most part, I will only be in a stock less than a half hour. 100% cash at the end of the day. If there is not a good play, I don't force it. I have gone several days before making a play, yet I'm in front of the computer with my SOES software when a timely play arrives. Last year I made over 400 trades. This is my only job. It's the best home office job to ever have. I love it! I bought Ted Tesser's book and it looks like, by his definition, that I can declare myself as a TRADER. I can deduct my monthly business costs etc. Would an IRS audit dispute this? S.W.

To: Colin Cody who wrote (27)	2/16/1998 3:21:00 PM
From: Robert A. Green, CPA	Read Replies (2) \| Respond to of 1383

The tax code does not say a trading trade or business or for that matter any trade or business has to be "full-time." Do you think America's billionaires work full-time at any one of their 100+ trade or businesses? Many of us are employed at a job but we also have time to trade securities as a trade or business. A job takes 40+ hours per week Monday to Friday 9 to 5. We have mornings, nights, weekends, and Internet access at work. Many of us make security trades and conduct research during the day at our jobs. Many of us want to have a business of our own to supplement our wages. A trading business on the Internet is a great business for those who know how to make money doing it. It's fools gold for those who do not. For those naysayers about trader tax status, consider the following possibility. You are a trader (you trade daily and frequently, with the intention and goal of short-term price swings, etc.) and you report a long-term capital gain of $100,000. The IRS audits you and takes the position that you are a trader, not an investor and you are not entitled to the long-term capital gains rates. What do you do then? Like it or not, believe in the naysayers or not, afraid of the IRS or not, you are required to know what your tax status is and follow the law accordingly. Good luck, Bob