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Strategies & Market Trends : Active Internet Traders - tax questions & answers -- Ignore unavailable to you. Want to Upgrade?

To: Jon K. who wrote (7)	2/4/1999 6:50:00 PM
From: Colin Cody	Read Replies (1) \| Respond to of 31

Let's assume I make $100,000/yr from my full time job. Also made $100,000 from trading stocks with about 500 trades annually. Spending about 30 hours/week. UNCLEAR HOW YOU SPEND 30 HOURS TRADING AND ALSO SPEND FULL TIME WITH ANOTHER JOB. THIS MAY BE AN ISSUE WITH TRADER STATUS. 1. Can I be qualified as a trader? POSSIBLY 2. If I didn't have my full time job, would it make any difference? IT WOULD BE PREFERRABLE WHEN DETERMINING THAT YOU WERE A TRADER 3. If I made half of my trading income from regular account and the other half from tax deferred pension account, how does it affect my trader status? RETIREMENT ACCOUNTS HAVE IRS AND SEC RESTRICTIONS AGAINST DOING TRADE OR BUSINESS (TRADING) WITHIN THEM. ALSO, IN A TAX DEFERRED VEHICLE "WHAT'S THE POINT" IN BEING A TRADER? LOTS OF PERSONAL ISSUES HERE TO DISCUSS WITH YOUR OWN TAX ADVISOR. 4. Can you give an example who will be 'safe' to report as 'trader with MTM election'? What are the key qualification factors that decides the status of a trader? I POSTED A FEW ON A TAX OR TRADER THREAD A FEW DAYS AGO, IF YOU LOOK BACK IT SHOULD BE EASY TO FIND. Colin

To: Jon K. who wrote (7)	2/8/1999 5:09:00 PM
From: Robert A. Green, CPA	Read Replies (1) \| Respond to of 31

Green back from skiing vacation to answer your questions. Answers. Let's assume I make $100,000/yr from my full time job. Also made $100,000 from trading stocks with about 500 trades annually. Spending about 30 hours/week. 1. Can I be qualified as a trader? - Answer, yes. 2. If I didn't have my full time job, would it make any difference? - Answer, yes it would make a more definate yes that would be harder to challenge. I believe that past tax court cases are pre-Internet Trading and do not address the significant changes in the trading business. It is now very easy establish and operate a serious daytrading business from your home, followed up at work and even in your car. 3. If I made half of my trading income from regular account and the other half from tax deferred pension account, how does it affect my trader status? - Answer, it doesn't. 4. Can you give an example who will be 'safe' to report as 'trader with MTM election'? What are the key qualification factors that decides the status of a trader? Answer - I raise many questions in factors in our Questionnaire to determine if you qualify. People can buy it for $15, or it comes free with our Trader Tax Guide for $25. The factors are your intent to carry on a trading business and the facts and circumstances that support that intent. Your trading should be frequent (daily or study the markets daily), continuous (all the time, not just during one quarter or when you think the markets are hot), and significant (many trades on many days). You should be spending a good portion of your time away from work and even at work (your employer may not like it) following, studying and trading the markets. If you are the type to spend alot of time on SI message boards, you probably are putting in the hours that are required. If you make or loose alot of money in the markets from these very active efforts and only make a little money on dividends and interest then obviously your portfolio income is derived from quick short term profits (or losses) rather than investment positions. greencompany.com TIA, Jon