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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: kaz who wrote (2028)	3/21/1999 11:01:00 AM
From: Gorak Shep	Read Replies (1) \| Respond to of 5810

If your expenses are things like monthly data fees, you can probably just add that to your first trade of each month on the schedule D I believe this is absolutely wrong. You cannot treat such expenses this way. If you have other expenses to write off, you'll have to have some income on your schedule C to write off against, at least I think that's correct. I believe this is also wrong. If you are filing as a Trader, your capital gains go only on Sched D and your expenses go on Sched C with no income there. Yes, this is unusual but it is the way it is done.

To: kaz who wrote (2028)	3/21/1999 12:16:00 PM
From: Colin Cody	Respond to of 5810

kaz, I have to agree basically with Gorak Shep's reply. I think you said you have a book on trader status?? Better read it carefully!! (g) A decent book is Ted Tessler's "Survival Guide" LOTS of misleading things in it, but overall a real decent overview of what trader status is all about. Get it and read it if you are doing your own tax return! just to clarify: for mark-to-market traders the stock transactions do not end up on Sch D as CAPITAL gains. MTM makes them ORDINARY gains. As we discussed before, even if you miscalculated or misapplied the trader status or MTM if your 1997 and/or 1988 return was originally filed as such prior to 3/18/99 you are "in". As Richard pointed out though, if you need to file an amended 1040X return by June 1999 to correct the errors, you may have to file form 3115 with the Nat'l IRS office and with the 1040X. If IS important that you correct a return by June - you risk retroactive loss of you tax benefits if you underpaid your taxes due to MTM/Trader errors. Colin