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

To: WallStBum who wrote (377)	6/27/1998 5:54:00 PM
From: GT	Read Replies (2) \| Respond to of 1383

TAKING LOSSES ...I was looking at online investor where an article stated that one should try and avoid being classified as a "professional trader" because otherwise you would only be able to deduct up to $3000 worth of loosing trades per year while having to pay taxes on all gains. IS THIS TRUE !!!!!!!!!!!!!This year I have lost maybe $10,000 but also made over$20,000 and was DEFINATELY counting on subtracting the 10,000 loss from the 20,000 gains. I guess my questions are 1) What determines "professional trader" status 2) How can I best set up my trading status so as to be able to subtract all losses. 3) I want to be able to sell a loosing position - and turn right around and re-buy it - and subtract the first loss against the eventual profit when I re-sell the second position (in the same stock). I called the irs on this one and was told that I can buy back a loosing position in less than 30 days and apply the loss to the eventual gain - but not until I sell the second position. Any help would be greatly appreciated as I've been trading like a madman without any knowledge of the tax consequences.Thanks - Gordon.