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

To: Mark Z who wrote (599)	12/5/1998 1:58:00 PM
From: Colin Cody	Read Replies (1) \| Respond to of 1383

Mark I have used MBT for just a few days now and don't know how they handle this. I haven't even received any confirmations for trades yet, and have no idea how they have computed my $$ balance. (they DO send us trade confirmations, right?) I would ASSUME that the commission reduction would be allocated (by us) amoungst all trades ratably and therefore become part of the cost (or a reduction of the sales proceeds) of the stocks traded. For PRACTICAL purposes, you might report this commission rebate as a single sale with zero cost, ASSUMING you flip all trades daily and you have no wash-sale issues outstanding at year-end. The rebate is NOT "earned income." It is a capital gain item. The $200 data feed is deductible on line 22 Sch A for investors and line 11, 18, or 27 Sch C for Traders. Any rebate of that fee is used as a direct offset, reducing the deductible amount. This also is not "earned income." A Trader normally does not have earned income unless he received revenue for teaching trading methods, for example. Colin