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

To: Daniel Elkayam who wrote (210)	3/11/1998 8:20:00 AM
From: Colin Cody	Respond to of 1383

Daniel, Reply #24 was not written by Joel. The exact quote you are referring to is "Here are a few of the significant tax benefits to being a trader - A "Trader" can deduct unlimited trading losses (realized and unrealized) as ordinary losses against all their other taxable income. An "investor" is limited to deducting only realized losses". . This statement is technically correct, and your thinking that that means a taxpayer "CAN" deduct both expenses (computers, internet fees, office supplies, rent for an office) AND trading losses (stuff that normally is on Schedule D, subject to a $3,000 per year limit) is correct. . AND it also says "unrealized losses" which means if you even HELD a stock at December 31st but had not sold it -- that the loss on that too would be deductible!!! . Note the KEY WORD IN THE ABOVE: "CAN". . SURE a taxpayer CAN do the above but we are not talking a walk in the park. The statements were written by a S.I. member who disappeared after I started asking the hard questions. He may be still reading this thread and will certainly be able to respond. He said he is an expert in filing for clients using trader status!! . So here is MY OPINION: Forget it! (g) . There are many many caveats to watch out for. The chances of a taxpayer ACTUALLY qualifying for the implied "benefits" above are slim to none. If you are a serious trader and can afford to hire a CPA for several thousand $$$ to structure yourself properly you MAY be able to avail yourself to the "benefits" referred to above - IN A FEW YEARS. . Good Luck! . Colin