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

To: Kaye Thomas who wrote (855)	5/12/1999 10:22:00 PM
From: m-top	Respond to of 1383

Kaye, Thanks for the correction, the 25% figure does not appear to be correct. The federal component assuming maximum bracket would be (.4.396 + .6.2) = 27.84%. The mass state component would be 5% for a total tax rate of 32.84%. The 25% rate was quoted by my accountant but clearly does not appear correct. I will verify with him tomorrow. From the looks of it he may have used my effective rate (?) to come up with that number. Still it is a healthy savings from what would otherwise be paid. Agreed, futures are an entirely different animal with a very different character. Definitely only for the experienced trader. John

To: Kaye Thomas who wrote (855)	5/22/1999 6:18:00 PM
From: m-top	Read Replies (1) \| Respond to of 1383

Kaye, Taxes on 1256 contracts are per your prior memeo. I confirmed with my accountant. Still it is a much favored tax situation. I was also wondering if you could clarify what constitutes a 1256 contract. From what I can tell, it includes any non equity option, futures, futures options and dealer options. However, my accountant called the IRS and they said Index options such as OEX, NDX, and RUT did not fall into the 1256 contract category. Could you please clarify if Index options are covered under the 1256 treatment? Thanks. John