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

To: Len who wrote (116)	2/20/1998 2:56:00 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 1383

that's the very problem of having to put your expenses on sched c and your stock gains/losses on sched d.... if you have tons of trading expense on sched c without income on sched c it will probably raise a red flag....... but, that's the way it's done.....if you want to avoid putting those expenses on sched A and have them be subject to the 2% rule. gains and losses other wise in your trading ONLY become ordinary if you elect mark to market ........ otherwise they stay on sched D and are subject to the $3000 loss limitation per tax year.... that means... in all of your trading for the entire year.....you never made money.....you lost money....and if you lost money then you can only take up to 3000 dollars against the rest of your income you report (such as salary from your job, interest, dividends etc)...anything over that you carry forward into the next year (s)...... It is the total LOSS...... not a trade or two that you may have lost.... it's what your whole year ended up looking like with all of your trades combined. Joel

To: Len who wrote (116)	2/20/1998 5:39:00 PM
From: Colin Cody	Read Replies (1) \| Respond to of 1383

Len, OK that's why I asked the question to make sure what you thought. NO a Trader hold CAPITAL ASSETS reportable on Sch D. . Effective with 1997 a Trader MAY ELECT to convert these CAPITAL Gains/Losses to ORDINARY. This is an ELECTION, and one that I don't know at this stage if many people will need to avail themselves to. . REPORTING requirements are NOT 100% clear. . IMO Treasury will take the position that Sch C will NOT see the items transferred from Sch D. I know this is in contradiction to the Barrons story. You will note in the Barrons story he does not actually say you WILL REPORT on Sch C. He falls back to the word "Probably". . Since I've had much more time than the Barrons author to review this, I say that it will be something less likely than "probably". I;m think something closer to "it will be a cold day in hell" (g) . Colin