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Ted Tesser wrote:
>......I have had cases where the difference between filing as a Trader and as an
>investor has been worth hundreds of thousands of dollars per tax return......
Would you be willing to elaborate? I must be missing
something.
Are you referring to deductible expenses? I know quite a few
floor traders. Some of them earn "hundreds of thousands of
dollars" annually; their deductible expenses, however,
appear to be relatively minimal.
Further, is the SE tax really that much of an issue? The
15.3% figure that has been tossed around is somewhat
misleading since most of it is capped. In 1998, for example,
taxpayers liable for SE tax paid 12.4% on the first $68,400
(i.e. circa $8500). The remaining 2.9% (Medicare) is
unlimited =but= both become ludicrous at a certain point.
Taxpayers who earned $500k in 1998 (all of which was subject
to the SE tax), for instance, would have incurred an SE tax
liability of around $23k.
Obviously, ordinary versus CG can be huge but both
"traders" and investors receive the same treatment. As a
result, I'm having a difficult time determining where the
=dramatic= benefits are realized. Or is it time for me to
get on the imagination transplant list?
Best regards,
Jim
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