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Phil:
Yeah you are right. It's easier for a CPA to let you pay YOUR MONEY
to the IRS in unncesssary and extra taxes. That way they don't have to take
time out to defend you if there is a problem. Having said that
I don't know of anyone else who is more knowledgable, competent
and professional than Ted and his staff. I don't get anything for that
compliment; just a satisified customer.
Charles
-----Original Message-----
From: nonlinear <keptinkaos@xxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Wednesday, September 15, 1999 9:16 AM
Subject: Re: trader status gotcha
>yer wrong phil. a section 475 election, like dealers or market makers
>make, allow them to write off unlimited losses greater than $3000, but
>they have to treat all income as ordinary (no 60/40 split) and pay
>social security taxes on their profits. a section 475 election is NOT a
>trader status filing.
>
>but with trader status, you're still restricted to the $3,000 in losses
>limit, but you get to deduct all your trading expenses on a schedule c,
>treat all profits or losses as capital income, reportable on schedule
>d, and pay no social security on the profits. also, losses greater than
>$3,000 are carried forward on future returns until it's used up.
>
>i've been using this setup for years and years(long before i even heard
>of ted tesser) with the irs' approval. this deal is perfect for the
>small trader who doesn't manage opm. but be careful when checking with
>your accountant, because most are whimps where the irs is concerned.
>
>TJ
>
>--- Phil Lane <accumulator@xxxxxxxxxxxxxx> wrote:
>> Trader status is great if you have short-term losses in excess of
>> $3000 and
>> you'd like to use them against other income.
>>
>> However, just in case somebody actually MAKES MONEY trading, trader
>> status
>> will cause all your trading income to be taxed at the VERY HIGH
>> short-term
>> rate - you lose the 60/40 split. And also once having elected trader
>> status
>> you can't go back again without a major hassle!
>>
>> This is my understanding - pls correct me if I'm wrong..
>
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