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

To: Colin Cody who wrote (301)	5/22/1998 11:53:00 PM
From: Monty Lenard	Read Replies (1) \| Respond to of 1383

Colin, I do some trading but not to the extent that I would consider myself a "Trader" in the eyes of the IRS (not that I would want to be anyway). The tax advantage from a personal standpoint is of little consequence. IMHO, (and from my experience) 99% of the auditors know less about the law that the practitioners. Having said that, I do feel that there is enough case law and regs available to make a case for someone that is truly a day trader even though they have another job. As you well know, each case must stand on its own; but, the key would be prep for the audit and having the ammunition (rulings, tax cases, etc). Because of the lack of knowledge by the examiners, I have found that they can be GUIDED by the tax prof. who has it all laid out for them. Also, having the client understand that there is some exposure is most important. I have read some of the post on this thread, and understand why many of the people trying to get an answer are really confused. Someone needs to give them a basic list of the tests applied by the courts and let them decide if they feel they meet the qualifications. Then, that person needs to hire a GOOD LOCAL CPA. The person they hire may not be familiar with the requirements of "Trader Status" off hand, but they can read and interpret the law and become familiar. If every CPA or Practitioner had to know about EVERY situation before a client walked in, they all would be out of business. I can assure everyone on this thread that they can find someone close by that is qualified to guide them and there is no need to handle it long distance! Colin, I don't know what your do for a living but you also seem to have a good grasp on this and have posted some good information for them; but, I have read some of the others that are terrible wrong (SE Tax)and some that seem to be confusing by design. Just hope the ones that are trying to gather accurate info. know who to listen to. Monty