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

To: whyretire who wrote (744)	2/27/1999 11:56:00 PM
From: Colin Cody	Read Replies (2) \| Respond to of 1383

Will, Generally speaking, the gains on capital assets (regular old stocks and bonds) by an Investor, Trader or Trader electing MTM are NOT subject to the SECA tax. Whether one reports said gains on Sch C of Sch D should not (can not) make a difference. A DEALER on the other hand does owe SECA tax. (A dealer is a Market Maker) and he would use Sch C to report the gains subject to the SECA tax. The "ordinary gains treatment" that is part of the MTM election made by a TRADER (I am not talking about MTM by a DEALER here) is specifically NOT subject to SECA tax. If you are reporting your trader status gains (on a form 1040 return) subject to SECA tax, you are, IMO, reporting it incorrectly. I'm not saying you wouldn't get away with it, just that it is wrong to do so!! Good Luck Colin Cody, CPA