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

To: Monty Lenard who wrote (314)	5/23/1998 3:48:00 PM
From: Monty Lenard	Respond to of 1383

TRADERS, DEALERS AND INVESTORS The following table summarizes how dealers, traders and investors treat transactions in various financial products, including Code Section references for related noncapital expenditures and interest expense. Not every category may exist for each financial product. The treatment of interest expense refers to interest expense that is not required to be capitalized. SUMMARY OF TAX TREATMENT OF DEALER, TRADER AND INVESTOR Dealer Gain or Loss Noncapital Interest Expenditures Expense Stock or securities Ordinary Business expense Noninvestment interest IRC + 162 IRC + 163(a) Equity options Capital Business expense Noninvestment interest 60/40 LT/ST IRC + 162 IRC + 163(a) IRC + 1256 Nonequity options Capital Business expense Noninvestment interest 60/40 LT/ST IRC + 162 IRC + 163(a) IRC + 1256 Trader Stock or securities Capital Business expense Noninvestment interest IRC + 1221 IRC + 162 IRC + 163(a) Equity options Capital Business expense Noninvestment Interest IRC + 1234 IRC + 162 IRC + 163(a) Nonequity options Capital Business expense Noninvestment interest 60/40 LT/ST IRC + 162 IRC + 163(a) IRC + 1256 Regulated futures Capital Business expense Noninvestment interest 60/40 LT/ST IRC + 162 IRC + 163(a) IRC + 1256 Investor Stock or securities Capital Income-producing expense Investment interest limit IRC + 1221 IRC + 212 IRC + 163(d) Equity options Capital Income-producing expense Investment interest limit IRC ++ 1221, 1234 IRC + 212 IRC + 163(d) Nonequity options Capital Incoming-producing expense Investment interest limit 60/40 LT/ST IRC + 212 IRC + 163(d) IRC + 1256 Regulated futures Capital Income-producing expense Investment interest limit 60/40 LT/ST IRC + 212 IRC + 163(d) IRC + 1256