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In a message dated 98-03-20 23:12:47 EST, you write:
<< They seem to think that the
determining factor in whether SE tax is due (ie whether the income is EARNED)
depends on whether you are a professional trader - opposed to just a trader
in
the business of trading your own account. A professional trader owns or
leases a seat on a national exchange, and/or trades from the floor -
therefore
he, and only he is required to pay SE tax. This is the way the specialized
Financial Division of the IRS wants it, and this is the way we have been
doing
it for years. I have many clients who trade full time off the floor and are
not required to pay it, and those who lease seats and are. >>
So, if I understand what you are saying, your interpretation is that the IRS
has TWO "trader" classifications. The only real difference being the location
of where you trade. The trader who incurs the expense of buying or leasing a
seat so that he can trade solely for himself in the pit is automatically
classified as a "professional trader" and therefore is subject to one set of
rules. However, the trader who may incur many more expenses such as leasing an
office, paying for software, paying for a datafeed, paying for computers, etc.
so that he can trade off-the-floor, will simply be classified as a "trader"
and will NOT be considered a professional and is subject to a different set of
rules.
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