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

To: CountofMoneyCristo who wrote (380)	6/28/1998 12:51:00 AM
From: WallStBum	Read Replies (1) \| Respond to of 1383

what is the top federal tax rate under which professional day-trading (thus classified as such)income can fall? Is it 39.6%, or less? It doesn't matter whether you elect trader status or not. The rate depends simply on the amount of time you hold a stock before selling. 1 year or less and it short-term cap gain, which is ordinary income, so yes 39.6. Greater than 1 year and it's 28%, greater than 18 months and it's 20%. Although Bill Archer did get an ammendment attached to this IRS overhaul bill which will bring the 18 months back to 12 months. hope that helps dax

To: CountofMoneyCristo who wrote (380)	6/28/1998 11:39:00 AM
From: Colin Cody	Respond to of 1383

Keep in mind that, say 30 years ago... 20 years ago, heck even FIVE years ago. VIRTUIALLY NO ONE was a stock trader. "Day Trading"??? Come on! 10 years ago you could have fit every Day Trader in the Country in one small gymnasium and still had enough room for the whole high school! . It simply wasn't (and frankly IMO still ISN'T) worth the TIME and INVESTMENT of our Congress to address the Trader issue and create a "bullet-proof" IRS Code just for this one tiny tiny segment of our society. . The COURTS have handled the job admirably. And before you say "what about all the disagreements" REMEMBER no matter how clear the law is, no matter how persuasive past court ruling were, there will ALWAYS be taxpayers who (after the fact) will PUSH THE ENVELOPE to suit their particular situation. And you know what? Thank God we CAN DO THAT here in America. In other Countries they'd just take you out back and shoot you if you dare challenged the government's tax collection policies. . ---------------------- what is the top federal tax rate under which professional day-trading (thus classified as such)income can fall? Is it 39.6%, or less? 39.6% is the top Federal tax rate for an individual. A Trader's tax RATES are identical to those of an INVESTOR, with the one possible exception of a new and rare election available to Traders since late 1997 (the election could possibly raise the tax rates). . Colin